Correlation Between COLUMBIA SPORTSWEAR and JD HEALTH

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

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

Diversification Opportunities for COLUMBIA SPORTSWEAR and JD HEALTH

-0.03

Correlation Coefficient

COLUMBIA SPORTSWEAR  JD HEALTH

Good diversification

The 3 months correlation between COLUMBIA and 8ZN is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR are associated (or correlated) with JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and JD HEALTH go up and down completely randomly.

Pair Corralation between COLUMBIA SPORTSWEAR and JD HEALTH

Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to under-perform the JD HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, COLUMBIA SPORTSWEAR is 1.66 times less risky than JD HEALTH. The stock trades about -0.11 of its potential returns per unit of risk. The JD HEALTH INTL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  356.00  in JD HEALTH INTL on December 21, 2024 and sell it today you would earn a total of  32.00  from holding JD HEALTH INTL or generate 8.99% return on investment over 90 days.

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

COLUMBIA SPORTSWEAR  vs.  JD HEALTH INTL

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.

JD HEALTH INTL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JD HEALTH INTL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, JD HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with COLUMBIA SPORTSWEAR and JD HEALTH

The main advantage of trading using opposite COLUMBIA SPORTSWEAR and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR position performs unexpectedly, JD HEALTH 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.

The idea behind COLUMBIA SPORTSWEAR and JD HEALTH INTL 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.