Correlation Between Ecora Resources and Columbia Sportswear

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

By analyzing existing cross correlation between Ecora Resources PLC and Columbia Sportswear, you can compare the effects of market volatilities on Ecora Resources 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 Ecora Resources with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecora Resources and Columbia Sportswear.

Diversification Opportunities for Ecora Resources and Columbia Sportswear

-0.1

Correlation Coefficient

Ecora Resources  Columbia Sportswear

Good diversification

The 3 months correlation between Ecora and Columbia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ecora Resources PLC and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Ecora Resources 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 Ecora Resources PLC 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 Ecora Resources i.e., Ecora Resources and Columbia Sportswear go up and down completely randomly.

Pair Corralation between Ecora Resources and Columbia Sportswear

Assuming the 90 days horizon Ecora Resources PLC is expected to generate 1.22 times more return on investment than Columbia Sportswear. However, Ecora Resources is 1.22 times more volatile than Columbia Sportswear. It trades about 0.03 of its potential returns per unit of risk. Columbia Sportswear is currently generating about -0.12 per unit of risk. If you would invest  74.00  in Ecora Resources PLC on December 22, 2024 and sell it today you would earn a total of  2.00  from holding Ecora Resources PLC or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Ecora Resources PLC  vs.  Columbia Sportswear

Ecora Resources PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ecora Resources PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ecora Resources 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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ecora Resources and Columbia Sportswear

The main advantage of trading using opposite Ecora Resources and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecora Resources 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 Ecora Resources PLC 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.