Correlation Between NTG Nordic and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both NTG Nordic 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 NTG Nordic and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NTG Nordic Transport and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on NTG Nordic 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 NTG Nordic with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NTG Nordic and COLUMBIA SPORTSWEAR.
Diversification Opportunities for NTG Nordic and COLUMBIA SPORTSWEAR
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NTG and COLUMBIA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding NTG Nordic Transport and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and NTG Nordic 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 NTG Nordic Transport 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 NTG Nordic i.e., NTG Nordic and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between NTG Nordic and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon NTG Nordic Transport is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, NTG Nordic is 1.84 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.01 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.01 per unit of volatility. If you would invest 8,472 in COLUMBIA SPORTSWEAR on October 25, 2024 and sell it today you would lose (72.00) from holding COLUMBIA SPORTSWEAR or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NTG Nordic Transport vs. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| NTG Nordic Transport |
| COLUMBIA SPORTSWEAR |
NTG Nordic and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NTG Nordic and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite NTG Nordic and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NTG Nordic 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.| NTG Nordic vs. FIH MOBILE | NTG Nordic vs. MAVEN WIRELESS SWEDEN | NTG Nordic vs. SCOTT TECHNOLOGY | NTG Nordic vs. Charter Communications |
| COLUMBIA SPORTSWEAR vs. LPKF Laser Electronics | COLUMBIA SPORTSWEAR vs. GWILLI FOOD | COLUMBIA SPORTSWEAR vs. EBRO FOODS | COLUMBIA SPORTSWEAR vs. Richardson Electronics |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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