Correlation Between Intel and Apple
Can any of the company-specific risk be diversified away by investing in both Intel and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Apple Inc, you can compare the effects of market volatilities on Intel and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Apple.
Diversification Opportunities for Intel and Apple
Poor diversification
The 3 months correlation between Intel and Apple is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Intel i.e., Intel and Apple go up and down completely randomly.
Pair Corralation between Intel and Apple
Assuming the 90 days trading horizon Intel is expected to generate 2.85 times more return on investment than Apple. However, Intel is 2.85 times more volatile than Apple Inc. It trades about 0.13 of its potential returns per unit of risk. Apple Inc is currently generating about 0.13 per unit of risk. If you would invest 2,133 in Intel on August 29, 2024 and sell it today you would earn a total of 206.00 from holding Intel or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Apple Inc
Performance |
| Timeline |
| Intel |
| Apple Inc |
Intel and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Apple
The main advantage of trading using opposite Intel and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.The idea behind Intel and Apple Inc 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.| Apple vs. Ryanair Holdings plc | Apple vs. SBA Communications Corp | Apple vs. Consolidated Communications Holdings | Apple vs. Singapore Telecommunications Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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