Correlation Between Rocky Brands and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Rocky Brands 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 Rocky Brands and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and Columbia Sportswear, you can compare the effects of market volatilities on Rocky Brands 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 Rocky Brands with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and Columbia Sportswear.
Diversification Opportunities for Rocky Brands and Columbia Sportswear
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rocky and Columbia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Rocky Brands 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 Rocky Brands 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 Rocky Brands i.e., Rocky Brands and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Rocky Brands and Columbia Sportswear
Given the investment horizon of 90 days Rocky Brands is expected to generate 2.43 times more return on investment than Columbia Sportswear. However, Rocky Brands is 2.43 times more volatile than Columbia Sportswear. It trades about 0.2 of its potential returns per unit of risk. Columbia Sportswear is currently generating about -0.26 per unit of risk. If you would invest 2,239 in Rocky Brands on October 20, 2024 and sell it today you would earn a total of 178.00 from holding Rocky Brands or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Rocky Brands vs. Columbia Sportswear
Performance |
| Timeline |
| Rocky Brands |
| Columbia Sportswear |
Rocky Brands and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and Columbia Sportswear
The main advantage of trading using opposite Rocky Brands and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands 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.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
| Columbia Sportswear vs. Vince Holding Corp | Columbia Sportswear vs. Ermenegildo Zegna NV | Columbia Sportswear vs. Gildan Activewear | Columbia Sportswear vs. G III Apparel Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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