Correlation Between Columbia Sportswear and AUSTEVOLL SEAFOOD
Can any of the company-specific risk be diversified away by investing in both Columbia Sportswear and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Sportswear and AUSTEVOLL SEAFOOD, you can compare the effects of market volatilities on Columbia Sportswear and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and AUSTEVOLL SEAFOOD.
Diversification Opportunities for Columbia Sportswear and AUSTEVOLL SEAFOOD
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Columbia and AUSTEVOLL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and AUSTEVOLL SEAFOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSTEVOLL SEAFOOD has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and AUSTEVOLL SEAFOOD go up and down completely randomly.
Pair Corralation between Columbia Sportswear and AUSTEVOLL SEAFOOD
Assuming the 90 days horizon Columbia Sportswear is expected to generate 1.32 times more return on investment than AUSTEVOLL SEAFOOD. However, Columbia Sportswear is 1.32 times more volatile than AUSTEVOLL SEAFOOD. It trades about 0.37 of its potential returns per unit of risk. AUSTEVOLL SEAFOOD is currently generating about 0.13 per unit of risk. If you would invest 6,923 in Columbia Sportswear on August 30, 2024 and sell it today you would earn a total of 1,327 from holding Columbia Sportswear or generate 19.17% 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. AUSTEVOLL SEAFOOD
Performance |
| Timeline |
| Columbia Sportswear |
| AUSTEVOLL SEAFOOD |
Columbia Sportswear and AUSTEVOLL SEAFOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Sportswear and AUSTEVOLL SEAFOOD
The main advantage of trading using opposite Columbia Sportswear and AUSTEVOLL SEAFOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD will offset losses from the drop in AUSTEVOLL SEAFOOD's long position.| Columbia Sportswear vs. ABO GROUP ENVIRONMENT | Columbia Sportswear vs. THORNEY TECHS LTD | Columbia Sportswear vs. CECO ENVIRONMENTAL | Columbia Sportswear vs. Daido Steel Co |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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