Correlation Between GMO Internet and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both GMO Internet and COLUMBIA SPORTSWEAR 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 GMO Internet and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMO Internet and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on GMO Internet and COLUMBIA SPORTSWEAR 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 GMO Internet with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMO Internet and COLUMBIA SPORTSWEAR.
Diversification Opportunities for GMO Internet and COLUMBIA SPORTSWEAR
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMO and COLUMBIA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GMO Internet and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and GMO Internet 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 GMO Internet are associated (or correlated) with COLUMBIA SPORTSWEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLUMBIA SPORTSWEAR has no effect on the direction of GMO Internet i.e., GMO Internet and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between GMO Internet and COLUMBIA SPORTSWEAR
Assuming the 90 days horizon GMO Internet is expected to generate 5.52 times more return on investment than COLUMBIA SPORTSWEAR. However, GMO Internet is 5.52 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.09 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.02 per unit of risk. If you would invest 409.00 in GMO Internet on November 8, 2024 and sell it today you would earn a total of 1,301 from holding GMO Internet or generate 318.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMO Internet vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| GMO Internet |
| COLUMBIA SPORTSWEAR |
GMO Internet and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMO Internet and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite GMO Internet and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMO Internet position performs unexpectedly, COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR will offset losses from the drop in COLUMBIA SPORTSWEAR's long position.| GMO Internet vs. Scientific Games | GMO Internet vs. GREENX METALS LTD | GMO Internet vs. International Game Technology | GMO Internet vs. East Africa Metals |
| COLUMBIA SPORTSWEAR vs. MARKET VECTR RETAIL | COLUMBIA SPORTSWEAR vs. Tradegate AG Wertpapierhandelsbank | COLUMBIA SPORTSWEAR vs. BOSTON BEER A | COLUMBIA SPORTSWEAR vs. CANON MARKETING JP |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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