Correlation Between COLUMBIA SPORTSWEAR and Air Products
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Air Products and, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Air Products.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Air Products
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COLUMBIA and Air is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Air Products go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Air Products
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 1.03 times more return on investment than Air Products. However, COLUMBIA SPORTSWEAR is 1.03 times more volatile than Air Products and. It trades about 0.32 of its potential returns per unit of risk. Air Products and is currently generating about 0.27 per unit of risk. If you would invest 7,322 in COLUMBIA SPORTSWEAR on September 4, 2024 and sell it today you would earn a total of 978.00 from holding COLUMBIA SPORTSWEAR or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Air Products and
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Air Products |
COLUMBIA SPORTSWEAR and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Air Products
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| COLUMBIA SPORTSWEAR vs. TOTAL GABON | COLUMBIA SPORTSWEAR vs. Walgreens Boots Alliance | COLUMBIA SPORTSWEAR vs. Peak Resources Limited |
| Air Products vs. Westlake Chemical | Air Products vs. United Airlines Holdings | Air Products vs. AEGEAN AIRLINES | Air Products vs. Soken Chemical Engineering |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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