Correlation Between Columbia Sportswear and CHINA VANKE

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

Diversification Opportunities for Columbia Sportswear and CHINA VANKE

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Columbia and CHINA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD 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 CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and CHINA VANKE go up and down completely randomly.

Pair Corralation between Columbia Sportswear and CHINA VANKE

Assuming the 90 days horizon Columbia Sportswear is expected to under-perform the CHINA VANKE. But the stock apears to be less risky and, when comparing its historical volatility, Columbia Sportswear is 2.66 times less risky than CHINA VANKE. The stock trades about -0.02 of its potential returns per unit of risk. The CHINA VANKE TD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  127.00  in CHINA VANKE TD on April 20, 2025 and sell it today you would lose (73.00) from holding CHINA VANKE TD or give up 57.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Columbia Sportswear  vs.  CHINA VANKE TD

 Performance 
       Timeline  
Columbia Sportswear 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Columbia Sportswear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Columbia Sportswear is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
CHINA VANKE TD 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CHINA VANKE TD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Columbia Sportswear and CHINA VANKE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Columbia Sportswear and CHINA VANKE

The main advantage of trading using opposite Columbia Sportswear and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sportswear position performs unexpectedly, CHINA VANKE 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 CHINA VANKE will offset losses from the drop in CHINA VANKE's long position.
The idea behind Columbia Sportswear and CHINA VANKE TD 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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