Correlation Between Intel and Columbia Large

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

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

Diversification Opportunities for Intel and Columbia Large

-0.56

Correlation Coefficient

Intel  Columbia Large

Excellent diversification

The 3 months correlation between Intel and Columbia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Columbia Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Large 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Large Cap has no effect on the direction of Intel i.e., Intel and Columbia Large go up and down completely randomly.

Pair Corralation between Intel and Columbia Large

Given the investment horizon of 90 days Intel is expected to under-perform the Columbia Large. In addition to that, Intel is 2.61 times more volatile than Columbia Large Cap. It trades about -0.01 of its total potential returns per unit of risk. Columbia Large Cap is currently generating about 0.11 per unit of volatility. If you would invest  2,151  in Columbia Large Cap on October 26, 2024 and sell it today you would earn a total of  59.00  from holding Columbia Large Cap or generate 2.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	37.29%
Values	Daily Returns

Intel  vs.  Columbia Large 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 rather sound basic indicators, Intel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Columbia Large Cap

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Columbia Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Columbia Large may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Intel and Columbia Large

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

The idea behind Intel and Columbia Large 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.