Correlation Between GLG LIFE and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both GLG LIFE 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 GLG LIFE and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on GLG LIFE 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 GLG LIFE with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and COLUMBIA SPORTSWEAR.
Diversification Opportunities for GLG LIFE and COLUMBIA SPORTSWEAR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and COLUMBIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and GLG LIFE 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 GLG LIFE TECH 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 GLG LIFE i.e., GLG LIFE and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between GLG LIFE and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon GLG LIFE TECH is expected to generate 35.83 times more return on investment than COLUMBIA SPORTSWEAR. However, GLG LIFE is 35.83 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.06 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.03 per unit of risk. If you would invest 2.35 in GLG LIFE TECH on August 29, 2024 and sell it today you would lose (0.35) from holding GLG LIFE TECH or give up 14.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLG LIFE TECH vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| GLG LIFE TECH |
| COLUMBIA SPORTSWEAR |
GLG LIFE and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite GLG LIFE and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE 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.| GLG LIFE vs. MAGIC SOFTWARE ENTR | GLG LIFE vs. Harmony Gold Mining | GLG LIFE vs. Columbia Sportswear | GLG LIFE vs. MCEWEN MINING INC |
| COLUMBIA SPORTSWEAR vs. Cleanaway Waste Management | COLUMBIA SPORTSWEAR vs. Air Transport Services | COLUMBIA SPORTSWEAR vs. Texas Roadhouse | COLUMBIA SPORTSWEAR vs. Samsung Electronics 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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