Correlation Between Columbia Sportswear and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Canadian Natural 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 Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Canadian Natural Resources, you can compare the effects of market volatilities on Columbia Sportswear and Canadian Natural 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 Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Canadian Natural.
Diversification Opportunities for Columbia Sportswear and Canadian Natural
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Columbia and Canadian is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res 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 Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Canadian Natural go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Canadian Natural
Assuming the 90 days horizon Columbia Sportswear is expected to under-perform the Canadian Natural. But the stock apears to be less risky and, when comparing its historical volatility, Columbia Sportswear is 2.8 times less risky than Canadian Natural. The stock trades about -0.35 of its potential returns per unit of risk. The Canadian Natural Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,838 in Canadian Natural Resources on October 23, 2024 and sell it today you would earn a total of 296.00 from holding Canadian Natural Resources or generate 10.43% 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. Canadian Natural Resources
Performance |
| Timeline |
| Columbia Sportswear |
| Canadian Natural Res |
Columbia Sportswear and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Canadian Natural
The main advantage of trading using opposite Columbia Sportswear and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| Columbia Sportswear vs. HM HENMAUUNSPADR 15 | Columbia Sportswear vs. H M Hennes | Columbia Sportswear vs. Moncler SpA | Columbia Sportswear vs. VF Corporation |
| Canadian Natural vs. Columbia Sportswear | Canadian Natural vs. Playtech plc | Canadian Natural vs. PLAYMATES TOYS | Canadian Natural vs. LOANDEPOT INC A |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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