Correlation Between LOANDEPOT INC and Columbia Sportswear

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Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC 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 LOANDEPOT INC and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOANDEPOT INC A and Columbia Sportswear, you can compare the effects of market volatilities on LOANDEPOT INC 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 LOANDEPOT INC with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and Columbia Sportswear.

Diversification Opportunities for LOANDEPOT INC and Columbia Sportswear

LOANDEPOTColumbiaDiversified AwayLOANDEPOTColumbiaDiversified Away100%
0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between LOANDEPOT and Columbia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and LOANDEPOT INC 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 LOANDEPOT INC A 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 LOANDEPOT INC i.e., LOANDEPOT INC and Columbia Sportswear go up and down completely randomly.

Pair Corralation between LOANDEPOT INC and Columbia Sportswear

Assuming the 90 days horizon LOANDEPOT INC is expected to generate 14.18 times less return on investment than Columbia Sportswear. In addition to that, LOANDEPOT INC is 3.02 times more volatile than Columbia Sportswear. It trades about 0.0 of its total potential returns per unit of risk. Columbia Sportswear is currently generating about 0.11 per unit of volatility. If you would invest  7,272  in Columbia Sportswear on October 23, 2024 and sell it today you would earn a total of  778.00  from holding Columbia Sportswear or generate 10.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

LOANDEPOT INC A  vs.  Columbia Sportswear

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100102030
JavaScript chart by amCharts 3.21.15LDD CUW
       Timeline  
LOANDEPOT INC A 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LOANDEPOT INC A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LOANDEPOT INC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.61.822.22.42.6
Columbia Sportswear 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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. Despite nearly fragile basic indicators, Columbia Sportswear may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan707274767880828486

LOANDEPOT INC and Columbia Sportswear Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-15.83-11.86-7.88-3.910.03.857.8211.815.7819.76 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15LDD CUW
       Returns  

Pair Trading with LOANDEPOT INC and Columbia Sportswear

The main advantage of trading using opposite LOANDEPOT INC and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC 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 LOANDEPOT INC A 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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