Correlation Between ARDAGH METAL and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and COLUMBIA SPORTSWEAR.
Diversification Opportunities for ARDAGH METAL and COLUMBIA SPORTSWEAR
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARDAGH and COLUMBIA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between ARDAGH METAL and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, ARDAGH METAL is 4.08 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.24 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about -0.48 per unit of volatility. If you would invest 8,500 in COLUMBIA SPORTSWEAR on October 13, 2024 and sell it today you would lose (500.00) from holding COLUMBIA SPORTSWEAR or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| COLUMBIA SPORTSWEAR |
ARDAGH METAL and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite ARDAGH METAL and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. Goodyear Tire Rubber | ARDAGH METAL vs. NAGOYA RAILROAD | ARDAGH METAL vs. NEWELL RUBBERMAID | ARDAGH METAL vs. Applied Materials |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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