Correlation Between Columbia Sprtswr and Lakeland Inds

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

Diversification Opportunities for Columbia Sprtswr and Lakeland Inds

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Columbia and Lakeland is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Sprtswr and Lakeland Inds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Inds and Columbia Sprtswr 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 Sprtswr are associated (or correlated) with Lakeland Inds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Inds has no effect on the direction of Columbia Sprtswr i.e., Columbia Sprtswr and Lakeland Inds go up and down completely randomly.

Pair Corralation between Columbia Sprtswr and Lakeland Inds

Given the investment horizon of 90 days Columbia Sprtswr is expected to generate 0.91 times more return on investment than Lakeland Inds. However, Columbia Sprtswr is 1.1 times less risky than Lakeland Inds. It trades about -0.1 of its potential returns per unit of risk. Lakeland Inds is currently generating about -0.27 per unit of risk. If you would invest  7,080  in Columbia Sprtswr on July 4, 2022 and sell it today you would lose (350.00)  from holding Columbia Sprtswr or give up 4.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Columbia Sprtswr  vs.  Lakeland Inds

 Performance (%) 
       Timeline  
Columbia Sprtswr 
Columbia Performance
0 of 100
Over the last 90 days Columbia Sprtswr has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's essential indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Columbia Price Channel

Lakeland Inds 
Lakeland Performance
0 of 100
Over the last 90 days Lakeland Inds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Lakeland Price Channel

Columbia Sprtswr and Lakeland Inds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Columbia Sprtswr and Lakeland Inds

The main advantage of trading using opposite Columbia Sprtswr and Lakeland Inds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Sprtswr position performs unexpectedly, Lakeland Inds 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 Lakeland Inds will offset losses from the drop in Lakeland Inds' long position.
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The idea behind Columbia Sprtswr and Lakeland Inds 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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Check out your portfolio center. 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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