Correlation Between COLUMBIA SPORTSWEAR and Western Copper
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Western Copper 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 Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Western Copper and, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Western Copper.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Western Copper
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COLUMBIA and Western is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Western Copper go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Western Copper
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.47 times more return on investment than Western Copper. However, COLUMBIA SPORTSWEAR is 2.13 times less risky than Western Copper. It trades about 0.01 of its potential returns per unit of risk. Western Copper and is currently generating about -0.01 per unit of risk. If you would invest 8,279 in COLUMBIA SPORTSWEAR on September 1, 2024 and sell it today you would earn a total of 21.00 from holding COLUMBIA SPORTSWEAR or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Western Copper and
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Western Copper |
COLUMBIA SPORTSWEAR and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Western Copper
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| COLUMBIA SPORTSWEAR vs. SIVERS SEMICONDUCTORS AB | COLUMBIA SPORTSWEAR vs. Darden Restaurants | COLUMBIA SPORTSWEAR vs. Reliance Steel Aluminum | COLUMBIA SPORTSWEAR vs. Q2M Managementberatung AG |
| Western Copper vs. BHP Group Limited | Western Copper vs. Rio Tinto Group | Western Copper vs. Rio Tinto Group | Western Copper vs. Vale SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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