Correlation Between China Eastern and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both China Eastern 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 China Eastern and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Eastern Airlines and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on China Eastern 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 China Eastern with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Eastern and COLUMBIA SPORTSWEAR.
Diversification Opportunities for China Eastern and COLUMBIA SPORTSWEAR
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and COLUMBIA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Eastern Airlines and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and China Eastern 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 China Eastern Airlines 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 China Eastern i.e., China Eastern and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between China Eastern and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon China Eastern Airlines is expected to generate 2.55 times more return on investment than COLUMBIA SPORTSWEAR. However, China Eastern is 2.55 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.07 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.12 per unit of risk. If you would invest 29.00 in China Eastern Airlines on November 7, 2024 and sell it today you would earn a total of 1.00 from holding China Eastern Airlines or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Eastern Airlines vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| China Eastern Airlines |
| COLUMBIA SPORTSWEAR |
China Eastern and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Eastern and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite China Eastern and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Eastern 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.| China Eastern vs. Tower One Wireless | China Eastern vs. 24SEVENOFFICE GROUP AB | China Eastern vs. SLR Investment Corp | China Eastern vs. New Residential Investment |
| COLUMBIA SPORTSWEAR vs. Uber Technologies | COLUMBIA SPORTSWEAR vs. Agilent Technologies | COLUMBIA SPORTSWEAR vs. Sunny Optical Technology | COLUMBIA SPORTSWEAR vs. Acadia Healthcare |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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