Correlation Between COLUMBIA SPORTSWEAR and LG Display
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and LG Display 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 LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and LG Display Co, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and LG Display.
Diversification Opportunities for COLUMBIA SPORTSWEAR and LG Display
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COLUMBIA and LGA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and LG Display go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and LG Display
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 1.2 times more return on investment than LG Display. However, COLUMBIA SPORTSWEAR is 1.2 times more volatile than LG Display Co. It trades about 0.18 of its potential returns per unit of risk. LG Display Co is currently generating about -0.18 per unit of risk. If you would invest 7,322 in COLUMBIA SPORTSWEAR on August 28, 2024 and sell it today you would earn a total of 1,078 from holding COLUMBIA SPORTSWEAR or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. LG Display Co
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| LG Display |
COLUMBIA SPORTSWEAR and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and LG Display
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| COLUMBIA SPORTSWEAR vs. Cleanaway Waste Management | COLUMBIA SPORTSWEAR vs. Air Transport Services | COLUMBIA SPORTSWEAR vs. Texas Roadhouse | COLUMBIA SPORTSWEAR vs. Samsung Electronics Co |
| LG Display vs. DXC Technology Co | LG Display vs. Vishay Intertechnology | LG Display vs. SOUTHWEST AIRLINES | LG Display vs. Cars Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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