Correlation Between Columbia Sportswear and Palantir Technologies
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Palantir Technologies 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 Palantir Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Palantir Technologies, you can compare the effects of market volatilities on Columbia Sportswear and Palantir Technologies 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 Palantir Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Palantir Technologies.
Diversification Opportunities for Columbia Sportswear and Palantir Technologies
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Palantir is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Palantir Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palantir Technologies 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 Palantir Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palantir Technologies has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Palantir Technologies go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Palantir Technologies
Assuming the 90 days horizon Columbia Sportswear is expected to under-perform the Palantir Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Columbia Sportswear is 2.56 times less risky than Palantir Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Palantir Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Palantir Technologies on August 25, 2024 and sell it today you would earn a total of 5,485 from holding Palantir Technologies or generate 783.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Columbia Sportswear vs. Palantir Technologies
Performance |
| Timeline |
| Columbia Sportswear |
| Palantir Technologies |
Columbia Sportswear and Palantir Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Palantir Technologies
The main advantage of trading using opposite Columbia Sportswear and Palantir Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Palantir Technologies 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 Palantir Technologies will offset losses from the drop in Palantir Technologies' long position.| Columbia Sportswear vs. HM HENMAUUNSPADR 15 | Columbia Sportswear vs. H M Hennes | Columbia Sportswear vs. H M Hennes | Columbia Sportswear vs. Moncler SpA |
| Palantir Technologies vs. SPARTAN STORES | Palantir Technologies vs. Retail Estates NV | Palantir Technologies vs. Canon Marketing Japan | Palantir Technologies vs. The Trade Desk |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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