Correlation Between COLUMBIA SPORTSWEAR and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and FUYO GENERAL 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 FUYO GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and FUYO GENERAL LEASE, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and FUYO GENERAL.
Diversification Opportunities for COLUMBIA SPORTSWEAR and FUYO GENERAL
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COLUMBIA and FUYO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and FUYO GENERAL go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and FUYO GENERAL
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 3.07 times less return on investment than FUYO GENERAL. But when comparing it to its historical volatility, COLUMBIA SPORTSWEAR is 1.06 times less risky than FUYO GENERAL. It trades about 0.01 of its potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,300 in FUYO GENERAL LEASE on September 1, 2024 and sell it today you would earn a total of 650.00 from holding FUYO GENERAL LEASE or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| FUYO GENERAL LEASE |
COLUMBIA SPORTSWEAR and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and FUYO GENERAL
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| COLUMBIA SPORTSWEAR vs. SIVERS SEMICONDUCTORS AB | COLUMBIA SPORTSWEAR vs. Darden Restaurants | COLUMBIA SPORTSWEAR vs. Reliance Steel Aluminum | COLUMBIA SPORTSWEAR vs. Q2M Managementberatung AG |
| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings | FUYO GENERAL vs. Origin Agritech |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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