Correlation Between COLUMBIA SPORTSWEAR and Intel

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

By analyzing existing cross correlation between COLUMBIA SPORTSWEAR and Intel, you can compare the effects of market volatilities on COLUMBIA SPORTSWEAR and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of COLUMBIA SPORTSWEAR and Intel.

Diversification Opportunities for COLUMBIA SPORTSWEAR and Intel

-0.14

Correlation Coefficient

COLUMBIA SPORTSWEAR  Intel

Good diversification

The 3 months correlation between COLUMBIA and Intel is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and Intel go up and down completely randomly.

Pair Corralation between COLUMBIA SPORTSWEAR and Intel

Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 0.48 times more return on investment than Intel. However, COLUMBIA SPORTSWEAR is 2.09 times less risky than Intel. It trades about 0.01 of its potential returns per unit of risk. Intel is currently generating about -0.01 per unit of risk. If you would invest  8,230  in COLUMBIA SPORTSWEAR on October 4, 2024 and sell it today you would lose (30.00) from holding COLUMBIA SPORTSWEAR or give up 0.36% of portfolio value over 90 days.

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

COLUMBIA SPORTSWEAR  vs.  Intel

COLUMBIA SPORTSWEAR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COLUMBIA SPORTSWEAR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, COLUMBIA SPORTSWEAR unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Intel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with COLUMBIA SPORTSWEAR and Intel

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

The idea behind COLUMBIA SPORTSWEAR and Intel 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.

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 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.