Correlation Between Columbia Sportswear and Carters
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Carters 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 Columbia Sportswear and Carters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Carters, you can compare the effects of market volatilities on Columbia Sportswear and Carters 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 Columbia Sportswear with a short position of Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Carters.
Diversification Opportunities for Columbia Sportswear and Carters
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and Carters is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters and Columbia Sportswear 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 Columbia Sportswear are associated (or correlated) with Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Carters go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Carters
Given the investment horizon of 90 days Columbia Sportswear is expected to generate 0.74 times more return on investment than Carters. However, Columbia Sportswear is 1.35 times less risky than Carters. It trades about 0.01 of its potential returns per unit of risk. Carters is currently generating about -0.07 per unit of risk. If you would invest 8,634 in Columbia Sportswear on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Columbia Sportswear or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. Carters
Performance |
| Timeline |
| Columbia Sportswear |
| Carters |
Columbia Sportswear and Carters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Carters
The main advantage of trading using opposite Columbia Sportswear and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.| Columbia Sportswear vs. Vince Holding Corp | Columbia Sportswear vs. Ermenegildo Zegna NV | Columbia Sportswear vs. Gildan Activewear | Columbia Sportswear vs. G III Apparel Group |
| Carters vs. Childrens Place | Carters vs. Gildan Activewear | Carters vs. Oxford Industries | Carters vs. Columbia Sportswear |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets |