Correlation Between Intel and Sea
Can any of the company-specific risk be diversified away by investing in both Intel and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Sea Limited, you can compare the effects of market volatilities on Intel and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Sea.
Diversification Opportunities for Intel and Sea
Very poor diversification
The 3 months correlation between Intel and Sea is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Limited has no effect on the direction of Intel i.e., Intel and Sea go up and down completely randomly.
Pair Corralation between Intel and Sea
Assuming the 90 days trading horizon Intel is expected to under-perform the Sea. In addition to that, Intel is 1.58 times more volatile than Sea Limited. It trades about -0.02 of its total potential returns per unit of risk. Sea Limited is currently generating about 0.18 per unit of volatility. If you would invest 6,330 in Sea Limited on September 1, 2024 and sell it today you would earn a total of 4,370 from holding Sea Limited or generate 69.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Sea Limited
Performance |
| Timeline |
| Intel |
| Sea Limited |
Intel and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Sea
The main advantage of trading using opposite Intel and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| Intel vs. PARKEN Sport Entertainment | Intel vs. ARDAGH METAL PACDL 0001 | Intel vs. Columbia Sportswear | Intel vs. POWER METALS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |