Correlation Between COLUMBIA SPORTSWEAR and Unipol Gruppo
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Unipol Gruppo 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 Unipol Gruppo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Unipol Gruppo Finanziario, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Unipol Gruppo 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 Unipol Gruppo. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Unipol Gruppo.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Unipol Gruppo
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COLUMBIA and Unipol is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Unipol Gruppo Finanziario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unipol Gruppo Finanziario 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 Unipol Gruppo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unipol Gruppo Finanziario has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Unipol Gruppo go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Unipol Gruppo
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 19.12 times less return on investment than Unipol Gruppo. But when comparing it to its historical volatility, COLUMBIA SPORTSWEAR is 1.31 times less risky than Unipol Gruppo. It trades about 0.01 of its potential returns per unit of risk. Unipol Gruppo Finanziario is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 432.00 in Unipol Gruppo Finanziario on October 11, 2024 and sell it today you would earn a total of 728.00 from holding Unipol Gruppo Finanziario or generate 168.52% 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. Unipol Gruppo Finanziario
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Unipol Gruppo Finanziario |
COLUMBIA SPORTSWEAR and Unipol Gruppo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Unipol Gruppo
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Unipol Gruppo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Unipol Gruppo 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 Unipol Gruppo will offset losses from the drop in Unipol Gruppo's long position.| COLUMBIA SPORTSWEAR vs. SPARTAN STORES | COLUMBIA SPORTSWEAR vs. QUEEN S ROAD | COLUMBIA SPORTSWEAR vs. Burlington Stores | COLUMBIA SPORTSWEAR vs. COSTCO WHOLESALE CDR |
| Unipol Gruppo vs. RYANAIR HLDGS ADR | Unipol Gruppo vs. Alaska Air Group | Unipol Gruppo vs. COLUMBIA SPORTSWEAR | Unipol Gruppo vs. SYSTEMAIR AB |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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