Correlation Between Intel and AIA Group
Can any of the company-specific risk be diversified away by investing in both Intel and AIA Group 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 AIA Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and AIA Group Limited, you can compare the effects of market volatilities on Intel and AIA Group 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 AIA Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and AIA Group.
Diversification Opportunities for Intel and AIA Group
Very weak diversification
The 3 months correlation between Intel and AIA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intel and AIA Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIA Group Limited 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 AIA Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIA Group Limited has no effect on the direction of Intel i.e., Intel and AIA Group go up and down completely randomly.
Pair Corralation between Intel and AIA Group
Assuming the 90 days trading horizon Intel is expected to generate 1.63 times more return on investment than AIA Group. However, Intel is 1.63 times more volatile than AIA Group Limited. It trades about 0.16 of its potential returns per unit of risk. AIA Group Limited is currently generating about 0.09 per unit of risk. If you would invest 1,937 in Intel on November 28, 2024 and sell it today you would earn a total of 253.00 from holding Intel or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. AIA Group Limited
Performance |
| Timeline |
| Intel |
| AIA Group Limited |
Intel and AIA Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and AIA Group
The main advantage of trading using opposite Intel and AIA Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, AIA Group 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 AIA Group will offset losses from the drop in AIA Group's long position.| Intel vs. United Microelectronics | Intel vs. AOI Electronics Co | Intel vs. MOVIE GAMES SA | Intel vs. PENN NATL GAMING |
| AIA Group vs. Chiba Bank | AIA Group vs. PT Bank Maybank | AIA Group vs. BioNTech SE | AIA Group vs. Allegheny Technologies Incorporated |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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