Correlation Between COLUMBIA SPORTSWEAR and Haleon PLC
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Haleon PLC 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 Haleon PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Haleon PLC, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Haleon PLC 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 Haleon PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Haleon PLC.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Haleon PLC
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COLUMBIA and Haleon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Haleon PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon PLC 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 Haleon PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon PLC has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Haleon PLC go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Haleon PLC
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.8 times more return on investment than Haleon PLC. However, COLUMBIA SPORTSWEAR is 1.25 times less risky than Haleon PLC. It trades about 0.06 of its potential returns per unit of risk. Haleon PLC is currently generating about 0.04 per unit of risk. If you would invest 6,567 in COLUMBIA SPORTSWEAR on September 4, 2024 and sell it today you would earn a total of 1,733 from holding COLUMBIA SPORTSWEAR or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Haleon PLC
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Haleon PLC |
COLUMBIA SPORTSWEAR and Haleon PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Haleon PLC
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Haleon PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Haleon PLC 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 Haleon PLC will offset losses from the drop in Haleon PLC's long position.| COLUMBIA SPORTSWEAR vs. TOTAL GABON | COLUMBIA SPORTSWEAR vs. Walgreens Boots Alliance | COLUMBIA SPORTSWEAR vs. Peak Resources Limited |
| Haleon PLC vs. Merck KGaA | Haleon PLC vs. Superior Plus Corp | Haleon PLC vs. NMI Holdings | Haleon PLC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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