Correlation Between COLUMBIA SPORTSWEAR and PG +

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

By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and PG E P6, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and PG + 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 PG +. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and PG +.

Diversification Opportunities for COLUMBIA SPORTSWEAR and PG +

0.62

Correlation Coefficient

COLUMBIA SPORTSWEAR  PG +

Poor diversification

The 3 months correlation between COLUMBIA and PCG6 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and PG + go up and down completely randomly.

Pair Corralation between COLUMBIA SPORTSWEAR and PG +

Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to under-perform the PG +. But the stock apears to be less risky and, when comparing its historical volatility, COLUMBIA SPORTSWEAR is 1.56 times less risky than PG +. The stock trades about -0.25 of its potential returns per unit of risk. The PG E P6 is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  2,200  in PG E P6 on October 6, 2024 and sell it today you would lose (60.00) from holding PG E P6 or give up 2.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

COLUMBIA SPORTSWEAR  vs.  PG E P6

COLUMBIA SPORTSWEAR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in COLUMBIA SPORTSWEAR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, COLUMBIA SPORTSWEAR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PG E P6

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PG E P6 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, PG + is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with COLUMBIA SPORTSWEAR and PG +

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

The idea behind COLUMBIA SPORTSWEAR and PG E P6 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.