Correlation Between COLUMBIA SPORTSWEAR and Sinopec Oilfield
Can any of the company-specific risk be diversified away by investing in both COLUMBIA SPORTSWEAR and Sinopec Oilfield 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 Sinopec Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Sinopec Oilfield Service, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Sinopec Oilfield 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 Sinopec Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Sinopec Oilfield.
Diversification Opportunities for COLUMBIA SPORTSWEAR and Sinopec Oilfield
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COLUMBIA and Sinopec is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Sinopec Oilfield Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Oilfield Service 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 Sinopec Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Oilfield Service has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Sinopec Oilfield go up and down completely randomly.
Pair Corralation between COLUMBIA SPORTSWEAR and Sinopec Oilfield
Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.75 times more return on investment than Sinopec Oilfield. However, COLUMBIA SPORTSWEAR is 1.33 times less risky than Sinopec Oilfield. It trades about 0.24 of its potential returns per unit of risk. Sinopec Oilfield Service is currently generating about 0.02 per unit of risk. If you would invest 7,820 in COLUMBIA SPORTSWEAR on September 14, 2024 and sell it today you would earn a total of 680.00 from holding COLUMBIA SPORTSWEAR or generate 8.7% 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. Sinopec Oilfield Service
Performance |
| Timeline |
| COLUMBIA SPORTSWEAR |
| Sinopec Oilfield Service |
COLUMBIA SPORTSWEAR and Sinopec Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COLUMBIA SPORTSWEAR and Sinopec Oilfield
The main advantage of trading using opposite COLUMBIA SPORTSWEAR and Sinopec Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, Sinopec Oilfield 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 Sinopec Oilfield will offset losses from the drop in Sinopec Oilfield's long position.| COLUMBIA SPORTSWEAR vs. DICKER DATA LTD | COLUMBIA SPORTSWEAR vs. Cogent Communications Holdings | COLUMBIA SPORTSWEAR vs. DATAGROUP SE | COLUMBIA SPORTSWEAR vs. Singapore Telecommunications Limited |
| Sinopec Oilfield vs. COLUMBIA SPORTSWEAR | Sinopec Oilfield vs. Lendlease Group | Sinopec Oilfield vs. WILLIS LEASE FIN | Sinopec Oilfield vs. LG Display Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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