Correlation Between AM EAGLE and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both AM EAGLE 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 AM EAGLE and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AM EAGLE OUTFITTERS and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on AM EAGLE 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 AM EAGLE with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AM EAGLE and COLUMBIA SPORTSWEAR.
Diversification Opportunities for AM EAGLE and COLUMBIA SPORTSWEAR
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFG and COLUMBIA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding AM EAGLE OUTFITTERS and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and AM EAGLE 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 AM EAGLE OUTFITTERS 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 AM EAGLE i.e., AM EAGLE and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between AM EAGLE and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, AM EAGLE is 1.61 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.02 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.04 per unit of volatility. If you would invest 7,837 in COLUMBIA SPORTSWEAR on September 1, 2024 and sell it today you would earn a total of 463.00 from holding COLUMBIA SPORTSWEAR or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AM EAGLE OUTFITTERS vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| AM EAGLE OUTFITTERS |
| COLUMBIA SPORTSWEAR |
AM EAGLE and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AM EAGLE and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite AM EAGLE and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE 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.| AM EAGLE vs. AVITA Medical | AM EAGLE vs. EAT WELL INVESTMENT | AM EAGLE vs. Diamyd Medical AB | AM EAGLE vs. CompuGroup Medical SE |
| COLUMBIA SPORTSWEAR vs. SIVERS SEMICONDUCTORS AB | COLUMBIA SPORTSWEAR vs. Darden Restaurants | COLUMBIA SPORTSWEAR vs. Reliance Steel Aluminum | COLUMBIA SPORTSWEAR vs. Q2M Managementberatung AG |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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