Correlation Between Columbia Sportswear and H M
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and H M 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 H M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and H M Hennes, you can compare the effects of market volatilities on Columbia Sportswear and H M 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 H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and H M.
Diversification Opportunities for Columbia Sportswear and H M
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbia and HMRZF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes 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 H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and H M go up and down completely randomly.
Pair Corralation between Columbia Sportswear and H M
Given the investment horizon of 90 days Columbia Sportswear is expected to under-perform the H M. But the stock apears to be less risky and, when comparing its historical volatility, Columbia Sportswear is 2.09 times less risky than H M. The stock trades about -0.01 of its potential returns per unit of risk. The H M Hennes is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,129 in H M Hennes on August 23, 2024 and sell it today you would earn a total of 266.00 from holding H M Hennes or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 67.14% |
| Values | Daily Returns |
Columbia Sportswear vs. H M Hennes
Performance |
| Timeline |
| Columbia Sportswear |
| H M Hennes |
Columbia Sportswear and H M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and H M
The main advantage of trading using opposite Columbia Sportswear and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, H M 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 H M will offset losses from the drop in H M'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 |
| H M vs. Superior Uniform Group | H M vs. Lakeland Industries | H M vs. Jerash Holdings | H M vs. G III Apparel Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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