Correlation Between COLUMBIA SPORTSWEAR and Tiangong International
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Tiangong International 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 Tiangong International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Tiangong International, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Tiangong International 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 Tiangong International. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Tiangong International.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Tiangong International
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COLUMBIA and Tiangong is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Tiangong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiangong International 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 Tiangong International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiangong International has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Tiangong International go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Tiangong International
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 5.62 times less return on investment than Tiangong International. But when comparing it to its historical volatility, COLUMBIA SPORTSWEAR is 3.16 times less risky than Tiangong International. It trades about 0.02 of its potential returns per unit of risk. Tiangong International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Tiangong International on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Tiangong International or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Tiangong International
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Tiangong International |
COLUMBIA SPORTSWEAR and Tiangong International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Tiangong International
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Tiangong International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Tiangong International 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 Tiangong International will offset losses from the drop in Tiangong International's long position.| COLUMBIA SPORTSWEAR vs. DICKER DATA LTD | COLUMBIA SPORTSWEAR vs. Cogent Communications Holdings | COLUMBIA SPORTSWEAR vs. DATAGROUP SE | COLUMBIA SPORTSWEAR vs. Singapore Telecommunications Limited |
| Tiangong International vs. COLUMBIA SPORTSWEAR | Tiangong International vs. Clean Energy Fuels | Tiangong International vs. KOOL2PLAY SA ZY | Tiangong International vs. American Public Education |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |