Correlation Between Columbia Sportswear and ENDESA ADR
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and ENDESA ADR 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 ENDESA ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and ENDESA ADR 12, you can compare the effects of market volatilities on Columbia Sportswear and ENDESA ADR 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 ENDESA ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and ENDESA ADR.
Diversification Opportunities for Columbia Sportswear and ENDESA ADR
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and ENDESA is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and ENDESA ADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENDESA ADR 12 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 ENDESA ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENDESA ADR 12 has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and ENDESA ADR go up and down completely randomly.
Pair Corralation between Columbia Sportswear and ENDESA ADR
Assuming the 90 days horizon Columbia Sportswear is expected to generate 1.51 times more return on investment than ENDESA ADR. However, Columbia Sportswear is 1.51 times more volatile than ENDESA ADR 12. It trades about 0.24 of its potential returns per unit of risk. ENDESA ADR 12 is currently generating about 0.25 per unit of risk. If you would invest 7,770 in Columbia Sportswear on September 13, 2024 and sell it today you would earn a total of 730.00 from holding Columbia Sportswear or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. ENDESA ADR 12
Performance |
| Timeline |
| Columbia Sportswear |
| ENDESA ADR 12 |
Columbia Sportswear and ENDESA ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and ENDESA ADR
The main advantage of trading using opposite Columbia Sportswear and ENDESA ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, ENDESA ADR 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 ENDESA ADR will offset losses from the drop in ENDESA ADR's long position.| Columbia Sportswear vs. Tencent Music Entertainment | Columbia Sportswear vs. SCANDMEDICAL SOLDK 040 | Columbia Sportswear vs. CITY OFFICE REIT | Columbia Sportswear vs. UNIVERSAL MUSIC GROUP |
| ENDESA ADR vs. Duke Energy | ENDESA ADR vs. WEC Energy Group | ENDESA ADR vs. CMS Energy | ENDESA ADR vs. Terna Rete |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |