Correlation Between Intrepid Income and Columbia Moderate

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

By analyzing existing cross correlation between Intrepid Income Fund and Columbia Moderate 529, you can compare the effects of market volatilities on Intrepid Income and Columbia Moderate 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 Intrepid Income with a short position of Columbia Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Income and Columbia Moderate.

Diversification Opportunities for Intrepid Income and Columbia Moderate

0.61

Correlation Coefficient

Intrepid Income  Columbia Moderate

Poor diversification

The 3 months correlation between Intrepid and Columbia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Income Fund and Columbia Moderate 529 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Moderate 529 and Intrepid Income 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 Intrepid Income Fund are associated (or correlated) with Columbia Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Moderate 529 has no effect on the direction of Intrepid Income i.e., Intrepid Income and Columbia Moderate go up and down completely randomly.

Pair Corralation between Intrepid Income and Columbia Moderate

Assuming the 90 days horizon Intrepid Income Fund is expected to generate 0.29 times more return on investment than Columbia Moderate. However, Intrepid Income Fund is 3.47 times less risky than Columbia Moderate. It trades about -0.07 of its potential returns per unit of risk. Columbia Moderate 529 is currently generating about -0.12 per unit of risk. If you would invest  906.00  in Intrepid Income Fund on September 22, 2024 and sell it today you would lose (2.00) from holding Intrepid Income Fund or give up 0.22% of portfolio value over 90 days.

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

Intrepid Income Fund  vs.  Columbia Moderate 529

Intrepid Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Income Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intrepid Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Moderate 529

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Moderate 529 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Columbia Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intrepid Income and Columbia Moderate

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

The idea behind Intrepid Income Fund and Columbia Moderate 529 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.