Correlation Between Fidelity National and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Columbia Sportswear, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Columbia Sportswear.
Diversification Opportunities for Fidelity National and Columbia Sportswear
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Columbia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Fidelity National and Columbia Sportswear
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Columbia Sportswear. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 1.53 times less risky than Columbia Sportswear. The stock trades about -0.1 of its potential returns per unit of risk. The Columbia Sportswear is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 6,923 in Columbia Sportswear on September 1, 2024 and sell it today you would earn a total of 1,277 from holding Columbia Sportswear or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Columbia Sportswear
Performance |
| Timeline |
| Fidelity National |
| Columbia Sportswear |
Fidelity National and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Columbia Sportswear
The main advantage of trading using opposite Fidelity National and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. Fukuyama Transporting Co | Fidelity National vs. DICKS Sporting Goods | Fidelity National vs. ARROW ELECTRONICS | Fidelity National vs. KIMBALL ELECTRONICS |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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