Correlation Between Columbia Sportswear and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and WuXi AppTec 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 WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and WuXi AppTec Co, you can compare the effects of market volatilities on Columbia Sportswear and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and WuXi AppTec.
Diversification Opportunities for Columbia Sportswear and WuXi AppTec
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Columbia and WuXi is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and WuXi AppTec go up and down completely randomly.
Pair Corralation between Columbia Sportswear and WuXi AppTec
Assuming the 90 days horizon Columbia Sportswear is expected to generate 0.57 times more return on investment than WuXi AppTec. However, Columbia Sportswear is 1.76 times less risky than WuXi AppTec. It trades about 0.36 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about -0.04 per unit of risk. If you would invest 6,923 in Columbia Sportswear on September 1, 2024 and sell it today you would earn a total of 1,277 from holding Columbia Sportswear or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Columbia Sportswear vs. WuXi AppTec Co
Performance |
| Timeline |
| Columbia Sportswear |
| WuXi AppTec |
Columbia Sportswear and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and WuXi AppTec
The main advantage of trading using opposite Columbia Sportswear and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| Columbia Sportswear vs. Ralph Lauren | Columbia Sportswear vs. Superior Plus Corp | Columbia Sportswear vs. NMI Holdings | Columbia Sportswear vs. Origin Agritech |
| WuXi AppTec vs. Danaher | WuXi AppTec vs. Danaher | WuXi AppTec vs. SIEMENS HEALTH ADR050 | WuXi AppTec vs. DexCom Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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