Correlation Between Applied Materials and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both Applied Materials 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 Applied Materials and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on Applied Materials 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 Applied Materials with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and COLUMBIA SPORTSWEAR.
Diversification Opportunities for Applied Materials and COLUMBIA SPORTSWEAR
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and COLUMBIA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and Applied Materials 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 Applied Materials 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 Applied Materials i.e., Applied Materials and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between Applied Materials and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon Applied Materials is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, Applied Materials is 1.45 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.07 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.39 per unit of volatility. If you would invest 6,973 in COLUMBIA SPORTSWEAR on August 31, 2024 and sell it today you would earn a total of 1,327 from holding COLUMBIA SPORTSWEAR or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| Applied Materials |
| COLUMBIA SPORTSWEAR |
Applied Materials and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite Applied Materials and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials 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.| Applied Materials vs. ASML Holding NV | Applied Materials vs. Superior Plus Corp | Applied Materials vs. NMI Holdings | Applied Materials vs. Origin Agritech |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |