Correlation Between Columbia Sportswear and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and CNVISION MEDIA 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 CNVISION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and CNVISION MEDIA, you can compare the effects of market volatilities on Columbia Sportswear and CNVISION MEDIA 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 CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and CNVISION MEDIA.
Diversification Opportunities for Columbia Sportswear and CNVISION MEDIA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Columbia and CNVISION is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA 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 CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between Columbia Sportswear and CNVISION MEDIA
Assuming the 90 days horizon Columbia Sportswear is expected to generate 0.91 times more return on investment than CNVISION MEDIA. However, Columbia Sportswear is 1.1 times less risky than CNVISION MEDIA. It trades about 0.34 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about -0.21 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. CNVISION MEDIA
Performance |
| Timeline |
| Columbia Sportswear |
| CNVISION MEDIA |
Columbia Sportswear and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and CNVISION MEDIA
The main advantage of trading using opposite Columbia Sportswear and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, CNVISION MEDIA 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 CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| Columbia Sportswear vs. Ralph Lauren | Columbia Sportswear vs. Superior Plus Corp | Columbia Sportswear vs. NMI Holdings | Columbia Sportswear vs. Origin Agritech |
| CNVISION MEDIA vs. Chesapeake Utilities | CNVISION MEDIA vs. Waste Management | CNVISION MEDIA vs. AGF Management Limited | CNVISION MEDIA vs. Coor Service Management |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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