Correlation Between Columbia Sportswear and Vince Holding

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

By analyzing existing cross correlation between Columbia Sportswear and Vince Holding Corp, you can compare the effects of market volatilities on Columbia Sportswear and Vince Holding 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 Vince Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Sportswear and Vince Holding.

Diversification Opportunities for Columbia Sportswear and Vince Holding

-0.1

Correlation Coefficient

Columbia Sportswear  Vince Holding

Good diversification

The 3 months correlation between Columbia and Vince is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sportswear and Vince Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vince Holding Corp 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 Vince Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vince Holding Corp has no effect on the direction of Columbia Sportswear i.e., Columbia Sportswear and Vince Holding go up and down completely randomly.

Pair Corralation between Columbia Sportswear and Vince Holding

Given the investment horizon of 90 days Columbia Sportswear is expected to generate 0.71 times more return on investment than Vince Holding. However, Columbia Sportswear is 1.4 times less risky than Vince Holding. It trades about 0.32 of its potential returns per unit of risk. Vince Holding Corp is currently generating about -0.1 per unit of risk. If you would invest  7,593  in Columbia Sportswear on August 31, 2024 and sell it today you would earn a total of  1,123  from holding Columbia Sportswear or generate 14.79% return on investment over 90 days.

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

Columbia Sportswear  vs.  Vince Holding Corp

Columbia Sportswear

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Sportswear are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, Columbia Sportswear may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Vince Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vince Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Vince Holding is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Columbia Sportswear and Vince Holding

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

The idea behind Columbia Sportswear and Vince Holding Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.