Correlation Between Yunhong CTI and Columbia Sportswear

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

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

Diversification Opportunities for Yunhong CTI and Columbia Sportswear

-0.05

Correlation Coefficient

Yunhong CTI  Columbia Sportswear

Good diversification

The 3 months correlation between Yunhong and Columbia is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Yunhong CTI and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Yunhong CTI 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 Yunhong CTI 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 Yunhong CTI i.e., Yunhong CTI and Columbia Sportswear go up and down completely randomly.

Pair Corralation between Yunhong CTI and Columbia Sportswear

If you would invest  7,806  in Columbia Sportswear on January 25, 2024 and sell it today you would earn a total of  93.00  from holding Columbia Sportswear or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Yunhong CTI  vs.  Columbia Sportswear

Yunhong CTI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yunhong CTI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Yunhong CTI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Sportswear

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Sportswear are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Columbia Sportswear is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Yunhong CTI and Columbia Sportswear

The main advantage of trading using opposite Yunhong CTI and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunhong CTI 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 Yunhong CTI 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.