Correlation Between Columbia Sportswear and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Strategic Investments AS, you can compare the effects of market volatilities on Columbia Sportswear and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Strategic Investments.
Diversification Opportunities for Columbia Sportswear and Strategic Investments
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbia and Strategic is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Strategic Investments go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Strategic Investments
Assuming the 90 days horizon Columbia Sportswear is expected to generate 0.54 times more return on investment than Strategic Investments. However, Columbia Sportswear is 1.84 times less risky than Strategic Investments. It trades about 0.28 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.2 per unit of risk. If you would invest 7,720 in Columbia Sportswear on September 12, 2024 and sell it today you would earn a total of 830.00 from holding Columbia Sportswear or generate 10.75% 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. Strategic Investments AS
Performance |
| Timeline |
| Columbia Sportswear |
| Strategic Investments |
Columbia Sportswear and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Strategic Investments
The main advantage of trading using opposite Columbia Sportswear and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Columbia Sportswear vs. Superior Plus Corp | Columbia Sportswear vs. SIVERS SEMICONDUCTORS AB | Columbia Sportswear vs. Norsk Hydro ASA | Columbia Sportswear vs. Reliance Steel Aluminum |
| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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