Correlation Between SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR

Can any of the company-specific risk be diversified away by investing in both SOEDER SPORTFISKE 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 SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOEDER SPORTFISKE AB and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on SOEDER SPORTFISKE 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 SOEDER SPORTFISKE with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR.

Diversification Opportunities for SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR

-0.26

Correlation Coefficient

SOEDER SPORTFISKE  COLUMBIA SPORTSWEAR

Very good diversification

The 3 months correlation between SOEDER and COLUMBIA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SOEDER SPORTFISKE AB and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB 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 SOEDER SPORTFISKE i.e., SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR go up and down completely randomly.

Pair Corralation between SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR

Assuming the 90 days horizon SOEDER SPORTFISKE is expected to generate 1.02 times less return on investment than COLUMBIA SPORTSWEAR. In addition to that, SOEDER SPORTFISKE is 2.07 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.05 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.11 per unit of volatility. If you would invest  6,994  in COLUMBIA SPORTSWEAR on October 26, 2024 and sell it today you would earn a total of  1,406  from holding COLUMBIA SPORTSWEAR or generate 20.1% return on investment over 90 days.

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

SOEDER SPORTFISKE AB  vs.  COLUMBIA SPORTSWEAR

SOEDER SPORTFISKE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SOEDER SPORTFISKE AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SOEDER SPORTFISKE reported solid returns over the last few months and may actually be approaching a breakup point.

COLUMBIA SPORTSWEAR

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COLUMBIA SPORTSWEAR are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COLUMBIA SPORTSWEAR unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR

The main advantage of trading using opposite SOEDER SPORTFISKE and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOEDER SPORTFISKE 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 SOEDER SPORTFISKE AB 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.