Correlation Between COLUMBIA SPORTSWEAR and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Graham Holdings 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 Graham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Graham Holdings Co, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Graham Holdings 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 Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Graham Holdings.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Graham Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COLUMBIA and Graham is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings 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 Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Graham Holdings go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Graham Holdings
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 1.24 times less return on investment than Graham Holdings. But when comparing it to its historical volatility, COLUMBIA SPORTSWEAR is 1.09 times less risky than Graham Holdings. It trades about 0.12 of its potential returns per unit of risk. Graham Holdings Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 85,827 in Graham Holdings Co on November 6, 2024 and sell it today you would earn a total of 3,173 from holding Graham Holdings Co or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
COLUMBIA SPORTSWEAR vs. Graham Holdings Co
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Graham Holdings |
COLUMBIA SPORTSWEAR and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Graham Holdings
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Graham Holdings 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 Graham Holdings will offset losses from the drop in Graham Holdings' long position.| COLUMBIA SPORTSWEAR vs. PREMIER FOODS | COLUMBIA SPORTSWEAR vs. ARDAGH METAL PACDL 0001 | COLUMBIA SPORTSWEAR vs. MCEWEN MINING INC | COLUMBIA SPORTSWEAR vs. PURE FOODS TASMANIA |
| Graham Holdings vs. IDP EDUCATION LTD | Graham Holdings vs. TAL Education Group | Graham Holdings vs. Strategic Education | Graham Holdings vs. Chegg 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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