Correlation Between Intel and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both Intel and Commercial Vehicle 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 Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Commercial Vehicle Group, you can compare the effects of market volatilities on Intel and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Commercial Vehicle.
Diversification Opportunities for Intel and Commercial Vehicle
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intel and Commercial is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Intel i.e., Intel and Commercial Vehicle go up and down completely randomly.
Pair Corralation between Intel and Commercial Vehicle
Assuming the 90 days trading horizon Intel is expected to generate 0.98 times more return on investment than Commercial Vehicle. However, Intel is 1.02 times less risky than Commercial Vehicle. It trades about 0.0 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.05 per unit of risk. If you would invest 2,361 in Intel on September 14, 2024 and sell it today you would lose (401.00) from holding Intel or give up 16.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Intel vs. Commercial Vehicle Group
Performance |
| Timeline |
| Intel |
| Commercial Vehicle |
Intel and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Commercial Vehicle
The main advantage of trading using opposite Intel and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| Intel vs. Commercial Vehicle Group | Intel vs. Strategic Education | Intel vs. G8 EDUCATION | Intel vs. DEVRY EDUCATION GRP |
| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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