Correlation Between COLUMBIA SPORTSWEAR and GSW Immobilien

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

By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and GSW Immobilien AG, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and GSW Immobilien 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 GSW Immobilien. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and GSW Immobilien.

Diversification Opportunities for COLUMBIA SPORTSWEAR and GSW Immobilien

0.08

Correlation Coefficient

COLUMBIA SPORTSWEAR  GSW Immobilien

Significant diversification

The 3 months correlation between COLUMBIA and GSW is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and GSW Immobilien AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSW Immobilien AG 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 GSW Immobilien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSW Immobilien AG has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and GSW Immobilien go up and down completely randomly.

Pair Corralation between COLUMBIA SPORTSWEAR and GSW Immobilien

Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to under-perform the GSW Immobilien. But the stock apears to be less risky and, when comparing its historical volatility, COLUMBIA SPORTSWEAR is 3.29 times less risky than GSW Immobilien. The stock trades about -0.11 of its potential returns per unit of risk. The GSW Immobilien AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,000  in GSW Immobilien AG on December 20, 2024 and sell it today you would lose (200.00) from holding GSW Immobilien AG or give up 2.5% of portfolio value over 90 days.

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

COLUMBIA SPORTSWEAR  vs.  GSW Immobilien AG

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.

GSW Immobilien AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GSW Immobilien AG are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental drivers, GSW Immobilien may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with COLUMBIA SPORTSWEAR and GSW Immobilien

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

The idea behind COLUMBIA SPORTSWEAR and GSW Immobilien AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.