Correlation Between WILLIS LEASE and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both WILLIS LEASE 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 WILLIS LEASE and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WILLIS LEASE FIN and Columbia Sportswear, you can compare the effects of market volatilities on WILLIS LEASE 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 WILLIS LEASE with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of WILLIS LEASE and Columbia Sportswear.
Diversification Opportunities for WILLIS LEASE and Columbia Sportswear
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WILLIS and Columbia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding WILLIS LEASE FIN and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and WILLIS LEASE 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 WILLIS LEASE FIN 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 WILLIS LEASE i.e., WILLIS LEASE and Columbia Sportswear go up and down completely randomly.
Pair Corralation between WILLIS LEASE and Columbia Sportswear
Assuming the 90 days horizon WILLIS LEASE FIN is expected to generate 2.98 times more return on investment than Columbia Sportswear. However, WILLIS LEASE is 2.98 times more volatile than Columbia Sportswear. It trades about -0.07 of its potential returns per unit of risk. Columbia Sportswear is currently generating about -0.35 per unit of risk. If you would invest 19,300 in WILLIS LEASE FIN on October 23, 2024 and sell it today you would lose (600.00) from holding WILLIS LEASE FIN or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WILLIS LEASE FIN vs. Columbia Sportswear
Performance |
| Timeline |
| WILLIS LEASE FIN |
| Columbia Sportswear |
WILLIS LEASE and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WILLIS LEASE and Columbia Sportswear
The main advantage of trading using opposite WILLIS LEASE and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WILLIS LEASE 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.| WILLIS LEASE vs. United Insurance Holdings | WILLIS LEASE vs. UNIQA INSURANCE GR | WILLIS LEASE vs. BW OFFSHORE LTD | WILLIS LEASE vs. ONWARD MEDICAL BV |
| Columbia Sportswear vs. HM HENMAUUNSPADR 15 | Columbia Sportswear vs. H M Hennes | Columbia Sportswear vs. Moncler SpA | Columbia Sportswear vs. VF Corporation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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