Correlation Between Columbia Sportswear and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and Tianjin Capital 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 Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and Tianjin Capital Environmental, you can compare the effects of market volatilities on Columbia Sportswear and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Tianjin Capital.
Diversification Opportunities for Columbia Sportswear and Tianjin Capital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and Tianjin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Tianjin Capital go up and down completely randomly.
Pair Corralation between Columbia Sportswear and Tianjin Capital
Assuming the 90 days horizon Columbia Sportswear is expected to under-perform the Tianjin Capital. But the stock apears to be less risky and, when comparing its historical volatility, Columbia Sportswear is 1.63 times less risky than Tianjin Capital. The stock trades about -0.37 of its potential returns per unit of risk. The Tianjin Capital Environmental is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Tianjin Capital Environmental on October 12, 2024 and sell it today you would earn a total of 1.00 from holding Tianjin Capital Environmental or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Sportswear vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Columbia Sportswear |
| Tianjin Capital Envi |
Columbia Sportswear and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and Tianjin Capital
The main advantage of trading using opposite Columbia Sportswear and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.| Columbia Sportswear vs. BioNTech SE | Columbia Sportswear vs. TEXAS ROADHOUSE | Columbia Sportswear vs. BROADWIND ENRGY | Columbia Sportswear vs. British American Tobacco |
| Tianjin Capital vs. SILVER BULLET DATA | Tianjin Capital vs. Columbia Sportswear | Tianjin Capital vs. GEELY AUTOMOBILE | Tianjin Capital vs. SOEDER SPORTFISKE 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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