Correlation Between COLUMBIA SPORTSWEAR and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Synchrony Financial 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 Synchrony Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Synchrony Financial, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Synchrony Financial 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 Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Synchrony Financial.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Synchrony Financial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COLUMBIA and Synchrony is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial 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 Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Synchrony Financial go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Synchrony Financial
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.63 times more return on investment than Synchrony Financial. However, COLUMBIA SPORTSWEAR is 1.59 times less risky than Synchrony Financial. It trades about 0.12 of its potential returns per unit of risk. Synchrony Financial is currently generating about -0.05 per unit of risk. If you would invest 8,050 in COLUMBIA SPORTSWEAR on November 7, 2024 and sell it today you would earn a total of 250.00 from holding COLUMBIA SPORTSWEAR or generate 3.11% 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. Synchrony Financial
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Synchrony Financial |
COLUMBIA SPORTSWEAR and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Synchrony Financial
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| COLUMBIA SPORTSWEAR vs. Uber Technologies | COLUMBIA SPORTSWEAR vs. Agilent Technologies | COLUMBIA SPORTSWEAR vs. Sunny Optical Technology | COLUMBIA SPORTSWEAR vs. Acadia Healthcare |
| Synchrony Financial vs. Warner Music Group | Synchrony Financial vs. UNIVMUSIC GRPADR050 | Synchrony Financial vs. HK Electric Investments | Synchrony Financial vs. MidCap Financial Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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