Correlation Between PENN NATL and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both PENN NATL 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 PENN NATL and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and Columbia Sportswear, you can compare the effects of market volatilities on PENN NATL 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 PENN NATL with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Columbia Sportswear.
Diversification Opportunities for PENN NATL and Columbia Sportswear
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PENN and Columbia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and PENN NATL 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 PENN NATL GAMING 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 PENN NATL i.e., PENN NATL and Columbia Sportswear go up and down completely randomly.
Pair Corralation between PENN NATL and Columbia Sportswear
Assuming the 90 days trading horizon PENN NATL is expected to generate 1.0 times less return on investment than Columbia Sportswear. In addition to that, PENN NATL is 2.02 times more volatile than Columbia Sportswear. It trades about 0.09 of its total potential returns per unit of risk. Columbia Sportswear is currently generating about 0.19 per unit of volatility. If you would invest 8,000 in Columbia Sportswear on November 4, 2024 and sell it today you would earn a total of 450.00 from holding Columbia Sportswear or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PENN NATL GAMING vs. Columbia Sportswear
Performance |
| Timeline |
| PENN NATL GAMING |
| Columbia Sportswear |
PENN NATL and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Columbia Sportswear
The main advantage of trading using opposite PENN NATL and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL 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.| PENN NATL vs. Computershare Limited | PENN NATL vs. SIEM OFFSHORE NEW | PENN NATL vs. RCS MediaGroup SpA | PENN NATL vs. PARKEN Sport Entertainment |
| Columbia Sportswear vs. Erste Group Bank | Columbia Sportswear vs. SUN LIFE FINANCIAL | Columbia Sportswear vs. INTERCONT HOTELS | Columbia Sportswear vs. MHP Hotel AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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