Correlation Between COLUMBIA SPORTSWEAR and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and CHINA EDUCATION 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 CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and CHINA EDUCATION.
Diversification Opportunities for COLUMBIA SPORTSWEAR and CHINA EDUCATION
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between COLUMBIA and CHINA is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and CHINA EDUCATION
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.35 times more return on investment than CHINA EDUCATION. However, COLUMBIA SPORTSWEAR is 2.88 times less risky than CHINA EDUCATION. It trades about -0.53 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.4 per unit of risk. If you would invest 8,550 in COLUMBIA SPORTSWEAR on October 11, 2024 and sell it today you would lose (550.00) from holding COLUMBIA SPORTSWEAR or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| CHINA EDUCATION GROUP |
COLUMBIA SPORTSWEAR and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and CHINA EDUCATION
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| COLUMBIA SPORTSWEAR vs. SPARTAN STORES | COLUMBIA SPORTSWEAR vs. QUEEN S ROAD | COLUMBIA SPORTSWEAR vs. Burlington Stores | COLUMBIA SPORTSWEAR vs. COSTCO WHOLESALE CDR |
| CHINA EDUCATION vs. Taiwan Semiconductor Manufacturing | CHINA EDUCATION vs. ELMOS SEMICONDUCTOR | CHINA EDUCATION vs. RCS MediaGroup SpA | CHINA EDUCATION vs. Nexstar Media Group |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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