Correlation Between ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL with a short position of COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR.
Diversification Opportunities for ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASTRA and COLUMBIA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, ASTRA INTERNATIONAL is 1.37 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 0.24 per unit of volatility. If you would invest 6,973 in COLUMBIA SPORTSWEAR on October 31, 2024 and sell it today you would earn a total of 1,577 from holding COLUMBIA SPORTSWEAR or generate 22.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ASTRA INTERNATIONAL vs. COLUMBIA SPORTSWEAR
Performance |
Timeline |
ASTRA INTERNATIONAL |
COLUMBIA SPORTSWEAR |
ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite ASTRA INTERNATIONAL and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL 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.ASTRA INTERNATIONAL vs. Apple Inc | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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