Correlation Between Economic Investment and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both Economic Investment and INTEL CDR 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 Economic Investment and INTEL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Economic Investment Trust and INTEL CDR, you can compare the effects of market volatilities on Economic Investment and INTEL CDR 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 Economic Investment with a short position of INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and INTEL CDR.
Diversification Opportunities for Economic Investment and INTEL CDR
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Economic and INTEL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR and Economic Investment 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 Economic Investment Trust are associated (or correlated) with INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Economic Investment i.e., Economic Investment and INTEL CDR go up and down completely randomly.
Pair Corralation between Economic Investment and INTEL CDR
Assuming the 90 days trading horizon Economic Investment Trust is expected to generate 0.31 times more return on investment than INTEL CDR. However, Economic Investment Trust is 3.27 times less risky than INTEL CDR. It trades about 0.09 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.02 per unit of risk. If you would invest 11,522 in Economic Investment Trust on October 9, 2024 and sell it today you would earn a total of 5,197 from holding Economic Investment Trust or generate 45.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.08% |
| Values | Daily Returns |
Economic Investment Trust vs. INTEL CDR
Performance |
| Timeline |
| Economic Investment Trust |
| INTEL CDR |
Economic Investment and INTEL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Economic Investment and INTEL CDR
The main advantage of trading using opposite Economic Investment and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment position performs unexpectedly, INTEL CDR 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 CDR will offset losses from the drop in INTEL CDR's long position.| Economic Investment vs. Uniteds Limited | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group | Economic Investment vs. Guardian Capital Group |
| INTEL CDR vs. Canlan Ice Sports | INTEL CDR vs. Rogers Communications | INTEL CDR vs. VIP Entertainment Technologies | INTEL CDR vs. Precision Drilling |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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