Correlation Between Columbia Sportswear and AEGEAN AIRLINES
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and AEGEAN AIRLINES 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 AEGEAN AIRLINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and AEGEAN AIRLINES, you can compare the effects of market volatilities on Columbia Sportswear and AEGEAN AIRLINES 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 AEGEAN AIRLINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and AEGEAN AIRLINES.
Diversification Opportunities for Columbia Sportswear and AEGEAN AIRLINES
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Columbia and AEGEAN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and AEGEAN AIRLINES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEGEAN AIRLINES 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 AEGEAN AIRLINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEGEAN AIRLINES has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and AEGEAN AIRLINES go up and down completely randomly.
Pair Corralation between Columbia Sportswear and AEGEAN AIRLINES
Assuming the 90 days horizon Columbia Sportswear is expected to generate 1.16 times more return on investment than AEGEAN AIRLINES. However, Columbia Sportswear is 1.16 times more volatile than AEGEAN AIRLINES. It trades about 0.28 of its potential returns per unit of risk. AEGEAN AIRLINES is currently generating about -0.2 per unit of risk. If you would invest 6,923 in Columbia Sportswear on August 27, 2024 and sell it today you would earn a total of 777.00 from holding Columbia Sportswear or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. AEGEAN AIRLINES
Performance |
| Timeline |
| Columbia Sportswear |
| AEGEAN AIRLINES |
Columbia Sportswear and AEGEAN AIRLINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and AEGEAN AIRLINES
The main advantage of trading using opposite Columbia Sportswear and AEGEAN AIRLINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, AEGEAN AIRLINES 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 AEGEAN AIRLINES will offset losses from the drop in AEGEAN AIRLINES's long position.| Columbia Sportswear vs. H M Hennes | Columbia Sportswear vs. Moncler SpA | Columbia Sportswear vs. Capri Holdings Limited | Columbia Sportswear vs. Gildan Activewear |
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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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