Correlation Between Tradeweb Markets and Columbia Sportswear

Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets 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 Tradeweb Markets and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tradeweb Markets and Columbia Sportswear, you can compare the effects of market volatilities on Tradeweb Markets 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 Tradeweb Markets with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Columbia Sportswear.

Diversification Opportunities for Tradeweb Markets and Columbia Sportswear

0.0

Correlation Coefficient

Tradeweb Markets  Columbia Sportswear

Pay attention - limited upside

The 3 months correlation between Tradeweb and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets i.e., Tradeweb Markets and Columbia Sportswear go up and down completely randomly.

Pair Corralation between Tradeweb Markets and Columbia Sportswear

Assuming the 90 days horizon Tradeweb Markets is expected to generate 0.87 times more return on investment than Columbia Sportswear. However, Tradeweb Markets is 1.15 times less risky than Columbia Sportswear. It trades about 0.04 of its potential returns per unit of risk. Columbia Sportswear is currently generating about -0.13 per unit of risk. If you would invest  12,789  in Tradeweb Markets on December 23, 2024 and sell it today you would earn a total of  411.00  from holding Tradeweb Markets or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tradeweb Markets  vs.  Columbia Sportswear

Tradeweb Markets

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tradeweb Markets are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tradeweb Markets is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Columbia Sportswear

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Sportswear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Tradeweb Markets and Columbia Sportswear

The main advantage of trading using opposite Tradeweb Markets and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets 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.

The idea behind Tradeweb Markets and Columbia Sportswear pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.