Correlation Between Columbia Sportswear and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Gaztransport Technigaz 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 Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Gaztransport Technigaz SA, you can compare the effects of market volatilities on Columbia Sportswear and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Gaztransport Technigaz.
Diversification Opportunities for Columbia Sportswear and Gaztransport Technigaz
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Gaztransport is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Gaztransport Technigaz
Assuming the 90 days horizon Columbia Sportswear is expected to generate 1.4 times more return on investment than Gaztransport Technigaz. However, Columbia Sportswear is 1.4 times more volatile than Gaztransport Technigaz SA. It trades about 0.34 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.09 per unit of risk. If you would invest 6,973 in Columbia Sportswear on August 31, 2024 and sell it today you would earn a total of 1,227 from holding Columbia Sportswear or generate 17.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Columbia Sportswear |
| Gaztransport Technigaz |
Columbia Sportswear and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Gaztransport Technigaz
The main advantage of trading using opposite Columbia Sportswear and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Columbia Sportswear vs. Ralph Lauren | Columbia Sportswear vs. Superior Plus Corp | Columbia Sportswear vs. NMI Holdings | Columbia Sportswear vs. Origin Agritech |
| Gaztransport Technigaz vs. Schlumberger Limited | Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. Superior Plus Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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