Correlation Between Columbia Sportswear and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Aristocrat Leisure 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 Aristocrat Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Aristocrat Leisure Limited, you can compare the effects of market volatilities on Columbia Sportswear and Aristocrat Leisure 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 Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Aristocrat Leisure.
Diversification Opportunities for Columbia Sportswear and Aristocrat Leisure
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Aristocrat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Aristocrat Leisure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure 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 Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Aristocrat Leisure
Assuming the 90 days horizon Columbia Sportswear is expected to generate 0.74 times more return on investment than Aristocrat Leisure. However, Columbia Sportswear is 1.35 times less risky than Aristocrat Leisure. It trades about 0.19 of its potential returns per unit of risk. Aristocrat Leisure Limited is currently generating about 0.13 per unit of risk. If you would invest 8,000 in Columbia Sportswear on November 4, 2024 and sell it today you would earn a total of 450.00 from holding Columbia Sportswear or generate 5.63% 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. Aristocrat Leisure Limited
Performance |
| Timeline |
| Columbia Sportswear |
| Aristocrat Leisure |
Columbia Sportswear and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Aristocrat Leisure
The main advantage of trading using opposite Columbia Sportswear and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure's long position.| Columbia Sportswear vs. Erste Group Bank | Columbia Sportswear vs. SUN LIFE FINANCIAL | Columbia Sportswear vs. INTERCONT HOTELS | Columbia Sportswear vs. MHP Hotel AG |
| Aristocrat Leisure vs. Ares Management Corp | Aristocrat Leisure vs. WESANA HEALTH HOLD | Aristocrat Leisure vs. HAVERTY FURNITURE A | Aristocrat Leisure vs. Autohome ADR |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |