Correlation Between CITIC Securities and COLUMBIA SPORTSWEAR

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

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

Diversification Opportunities for CITIC Securities and COLUMBIA SPORTSWEAR

0.04

Correlation Coefficient

CITIC Securities  COLUMBIA SPORTSWEAR

Significant diversification

The 3 months correlation between CITIC and COLUMBIA is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR and CITIC Securities 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 CITIC Securities 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 CITIC Securities i.e., CITIC Securities and COLUMBIA SPORTSWEAR go up and down completely randomly.

Pair Corralation between CITIC Securities and COLUMBIA SPORTSWEAR

Assuming the 90 days horizon CITIC Securities is expected to generate 1.51 times more return on investment than COLUMBIA SPORTSWEAR. However, CITIC Securities is 1.51 times more volatile than COLUMBIA SPORTSWEAR. It trades about 0.02 of its potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about -0.11 per unit of risk. If you would invest  260.00  in CITIC Securities on December 21, 2024 and sell it today you would earn a total of  2.00  from holding CITIC Securities or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

CITIC Securities  vs.  COLUMBIA SPORTSWEAR

CITIC Securities

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CITIC Securities is not utilizing all of its potentials. The current 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. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CITIC Securities and COLUMBIA SPORTSWEAR

The main advantage of trading using opposite CITIC Securities and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Securities 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 CITIC Securities 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.