Correlation Between COLUMBIA SPORTSWEAR and Mitsubishi Gas
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Mitsubishi Gas 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 Mitsubishi Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Mitsubishi Gas Chemical, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Mitsubishi Gas 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 Mitsubishi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Mitsubishi Gas.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Mitsubishi Gas
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COLUMBIA and Mitsubishi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Mitsubishi Gas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Gas Chemical 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 Mitsubishi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Gas Chemical has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Mitsubishi Gas go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Mitsubishi Gas
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to under-perform the Mitsubishi Gas. But the stock apears to be less risky and, when comparing its historical volatility, COLUMBIA SPORTSWEAR is 1.83 times less risky than Mitsubishi Gas. The stock trades about -0.4 of its potential returns per unit of risk. The Mitsubishi Gas Chemical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Mitsubishi Gas Chemical on October 23, 2024 and sell it today you would earn a total of 30.00 from holding Mitsubishi Gas Chemical or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Mitsubishi Gas Chemical
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Mitsubishi Gas Chemical |
COLUMBIA SPORTSWEAR and Mitsubishi Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Mitsubishi Gas
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Mitsubishi Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Mitsubishi Gas 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 Mitsubishi Gas will offset losses from the drop in Mitsubishi Gas' long position.| COLUMBIA SPORTSWEAR vs. Apple Inc | COLUMBIA SPORTSWEAR vs. Apple Inc | COLUMBIA SPORTSWEAR vs. Apple Inc | COLUMBIA SPORTSWEAR vs. Apple Inc |
| Mitsubishi Gas vs. United Airlines Holdings | Mitsubishi Gas vs. Aegean Airlines SA | Mitsubishi Gas vs. COLUMBIA SPORTSWEAR | Mitsubishi Gas vs. PLAYWAY SA ZY 10 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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