Correlation Between INTER CARS and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Columbia Sportswear at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining INTER CARS and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Columbia Sportswear, you can compare the effects of market volatilities on INTER CARS and Columbia Sportswear and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in INTER CARS with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Columbia Sportswear.
Diversification Opportunities for INTER CARS and Columbia Sportswear
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and Columbia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and INTER CARS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on INTER CARS SA are associated (or correlated) with Columbia Sportswear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sportswear has no effect on the direction of INTER CARS i.e., INTER CARS and Columbia Sportswear go up and down completely randomly.
Pair Corralation between INTER CARS and Columbia Sportswear
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.28 times more return on investment than Columbia Sportswear. However, INTER CARS is 1.28 times more volatile than Columbia Sportswear. It trades about 0.02 of its potential returns per unit of risk. Columbia Sportswear is currently generating about 0.01 per unit of risk. If you would invest 9,406 in INTER CARS SA on August 30, 2024 and sell it today you would earn a total of 1,354 from holding INTER CARS SA or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
INTER CARS SA vs. Columbia Sportswear
Performance |
| Timeline |
| INTER CARS SA |
| Columbia Sportswear |
INTER CARS and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Columbia Sportswear
The main advantage of trading using opposite INTER CARS and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Columbia Sportswear can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Columbia Sportswear will offset losses from the drop in Columbia Sportswear's long position.| INTER CARS vs. PT Astra International | INTER CARS vs. Continental Aktiengesellschaft | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings |
| Columbia Sportswear vs. ABO GROUP ENVIRONMENT | Columbia Sportswear vs. THORNEY TECHS LTD | Columbia Sportswear vs. CECO ENVIRONMENTAL | Columbia Sportswear vs. Daido Steel Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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