Correlation Between Sunny Optical and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Sunny Optical 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 Sunny Optical and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and Columbia Sportswear, you can compare the effects of market volatilities on Sunny Optical 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 Sunny Optical with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Columbia Sportswear.
Diversification Opportunities for Sunny Optical and Columbia Sportswear
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Columbia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Sunny Optical 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 Sunny Optical Technology 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 Sunny Optical i.e., Sunny Optical and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Sunny Optical and Columbia Sportswear
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.93 times more return on investment than Columbia Sportswear. However, Sunny Optical is 1.93 times more volatile than Columbia Sportswear. It trades about 0.23 of its potential returns per unit of risk. Columbia Sportswear is currently generating about 0.36 per unit of risk. If you would invest 612.00 in Sunny Optical Technology on September 1, 2024 and sell it today you would earn a total of 132.00 from holding Sunny Optical Technology or generate 21.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Columbia Sportswear
Performance |
| Timeline |
| Sunny Optical Technology |
| Columbia Sportswear |
Sunny Optical and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Columbia Sportswear
The main advantage of trading using opposite Sunny Optical and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical 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.| Sunny Optical vs. Altair Engineering | Sunny Optical vs. MGIC INVESTMENT | Sunny Optical vs. PennyMac Mortgage Investment | Sunny Optical vs. REGAL ASIAN INVESTMENTS |
| Columbia Sportswear vs. Ralph Lauren | Columbia Sportswear vs. Superior Plus Corp | Columbia Sportswear vs. NMI Holdings | Columbia Sportswear vs. Origin Agritech |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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