Correlation Between COLUMBIA SPORTSWEAR and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Commercial Vehicle 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 Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Commercial Vehicle Group, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Commercial Vehicle.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Commercial Vehicle
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COLUMBIA and Commercial is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Commercial Vehicle go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Commercial Vehicle
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.38 times more return on investment than Commercial Vehicle. However, COLUMBIA SPORTSWEAR is 2.64 times less risky than Commercial Vehicle. It trades about 0.08 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.15 per unit of risk. If you would invest 7,093 in COLUMBIA SPORTSWEAR on October 18, 2024 and sell it today you would earn a total of 1,007 from holding COLUMBIA SPORTSWEAR or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Commercial Vehicle Group
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Commercial Vehicle |
COLUMBIA SPORTSWEAR and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Commercial Vehicle
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| COLUMBIA SPORTSWEAR vs. RYU Apparel | COLUMBIA SPORTSWEAR vs. Urban Outfitters | COLUMBIA SPORTSWEAR vs. Federal Agricultural Mortgage | COLUMBIA SPORTSWEAR vs. Perdoceo Education |
| Commercial Vehicle vs. COLUMBIA SPORTSWEAR | Commercial Vehicle vs. Fukuyama Transporting Co | Commercial Vehicle vs. JD SPORTS FASH | Commercial Vehicle vs. Gaztransport Technigaz 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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