Correlation Between COLUMBIA SPORTSWEAR and Akebia Therapeutics
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Akebia Therapeutics 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 Akebia Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Akebia Therapeutics, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Akebia Therapeutics 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 Akebia Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Akebia Therapeutics.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Akebia Therapeutics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COLUMBIA and Akebia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Akebia Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akebia Therapeutics 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 Akebia Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akebia Therapeutics has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Akebia Therapeutics go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Akebia Therapeutics
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.46 times more return on investment than Akebia Therapeutics. However, COLUMBIA SPORTSWEAR is 2.16 times less risky than Akebia Therapeutics. It trades about 0.24 of its potential returns per unit of risk. Akebia Therapeutics is currently generating about -0.03 per unit of risk. If you would invest 7,820 in COLUMBIA SPORTSWEAR on September 14, 2024 and sell it today you would earn a total of 680.00 from holding COLUMBIA SPORTSWEAR or generate 8.7% 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. Akebia Therapeutics
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Akebia Therapeutics |
COLUMBIA SPORTSWEAR and Akebia Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Akebia Therapeutics
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Akebia Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Akebia Therapeutics 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 Akebia Therapeutics will offset losses from the drop in Akebia Therapeutics' 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 |
| Akebia Therapeutics vs. Corporate Office Properties | Akebia Therapeutics vs. KENEDIX OFFICE INV | Akebia Therapeutics vs. COLUMBIA SPORTSWEAR | Akebia Therapeutics vs. TITANIUM TRANSPORTGROUP |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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