Correlation Between Columbia Sportswear and Jerash Holdings
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Jerash Holdings 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 Jerash Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Jerash Holdings, you can compare the effects of market volatilities on Columbia Sportswear and Jerash Holdings 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 Jerash Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Jerash Holdings.
Diversification Opportunities for Columbia Sportswear and Jerash Holdings
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Jerash is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Jerash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jerash Holdings 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 Jerash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jerash Holdings has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Jerash Holdings go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Jerash Holdings
Given the investment horizon of 90 days Columbia Sportswear is expected to under-perform the Jerash Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Columbia Sportswear is 1.13 times less risky than Jerash Holdings. The stock trades about -0.26 of its potential returns per unit of risk. The Jerash Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 341.00 in Jerash Holdings on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Jerash Holdings or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Columbia Sportswear vs. Jerash Holdings
Performance |
| Timeline |
| Columbia Sportswear |
| Jerash Holdings |
Columbia Sportswear and Jerash Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Jerash Holdings
The main advantage of trading using opposite Columbia Sportswear and Jerash Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Jerash Holdings 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 Jerash Holdings will offset losses from the drop in Jerash Holdings' 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 |
| Jerash Holdings vs. Vince Holding Corp | Jerash Holdings vs. Oxford Industries | Jerash Holdings vs. Gildan Activewear | Jerash Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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