Correlation Between Columbia Sportswear and G III
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and G III 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 G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and G III Apparel Group, you can compare the effects of market volatilities on Columbia Sportswear and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and G III.
Diversification Opportunities for Columbia Sportswear and G III
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Columbia and GIII is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and G III go up and down completely randomly.
Pair Corralation between Columbia Sportswear and G III
Given the investment horizon of 90 days Columbia Sportswear is expected to generate 1.07 times more return on investment than G III. However, Columbia Sportswear is 1.07 times more volatile than G III Apparel Group. It trades about 0.29 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.11 per unit of risk. If you would invest 7,542 in Columbia Sportswear on August 27, 2024 and sell it today you would earn a total of 806.00 from holding Columbia Sportswear or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. G III Apparel Group
Performance |
| Timeline |
| Columbia Sportswear |
| G III Apparel |
Columbia Sportswear and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and G III
The main advantage of trading using opposite Columbia Sportswear and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's 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 |
| G III vs. Oxford Industries | G III vs. Ermenegildo Zegna NV | G III vs. Kontoor Brands | G III 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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