Correlation Between COLUMBIA SPORTSWEAR and ATT

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

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

Diversification Opportunities for COLUMBIA SPORTSWEAR and ATT

0.83

Correlation Coefficient

COLUMBIA SPORTSWEAR  ATT

Very poor diversification

The 3 months correlation between COLUMBIA and ATT is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and ATT go up and down completely randomly.

Pair Corralation between COLUMBIA SPORTSWEAR and ATT

Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to under-perform the ATT. But the stock apears to be less risky and, when comparing its historical volatility, COLUMBIA SPORTSWEAR is 1.13 times less risky than ATT. The stock trades about -0.25 of its potential returns per unit of risk. The ATT Inc is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  2,249  in ATT Inc on October 9, 2024 and sell it today you would lose (74.00) from holding ATT Inc or give up 3.29% of portfolio value over 90 days.

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

COLUMBIA SPORTSWEAR  vs.  ATT Inc

COLUMBIA SPORTSWEAR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COLUMBIA SPORTSWEAR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COLUMBIA SPORTSWEAR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ATT Inc

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ATT may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with COLUMBIA SPORTSWEAR and ATT

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

The idea behind COLUMBIA SPORTSWEAR and ATT Inc 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.