Correlation Between Intel and Columbia Mid

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

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

Diversification Opportunities for Intel and Columbia Mid

-0.57

Correlation Coefficient

Intel  Columbia Mid

Excellent diversification

The 3 months correlation between Intel and Columbia is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Columbia Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Mid Cap and Intel 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 Intel are associated (or correlated) with Columbia Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Mid Cap has no effect on the direction of Intel i.e., Intel and Columbia Mid go up and down completely randomly.

Pair Corralation between Intel and Columbia Mid

Given the investment horizon of 90 days Intel is expected to under-perform the Columbia Mid. In addition to that, Intel is 2.88 times more volatile than Columbia Mid Cap. It trades about -0.08 of its total potential returns per unit of risk. Columbia Mid Cap is currently generating about 0.13 per unit of volatility. If you would invest  2,792  in Columbia Mid Cap on October 12, 2024 and sell it today you would earn a total of  700.00  from holding Columbia Mid Cap or generate 25.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.04%
Values	Daily Returns

Intel  vs.  Columbia Mid Cap

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Columbia Mid Cap

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Columbia Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Columbia Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Columbia Mid

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

The idea behind Intel and Columbia Mid Cap 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.