Correlation Between Intel and Chemed
Can any of the company-specific risk be diversified away by investing in both Intel and Chemed 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 Chemed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Chemed, you can compare the effects of market volatilities on Intel and Chemed 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 Chemed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Chemed.
Diversification Opportunities for Intel and Chemed
Modest diversification
The 3 months correlation between Intel and Chemed is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Chemed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemed 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 Chemed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemed has no effect on the direction of Intel i.e., Intel and Chemed go up and down completely randomly.
Pair Corralation between Intel and Chemed
Assuming the 90 days trading horizon Intel is expected to under-perform the Chemed. In addition to that, Intel is 1.72 times more volatile than Chemed. It trades about -0.01 of its total potential returns per unit of risk. Chemed is currently generating about 0.27 per unit of volatility. If you would invest 50,000 in Chemed on October 31, 2024 and sell it today you would earn a total of 4,500 from holding Chemed or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Intel vs. Chemed
Performance |
| Timeline |
| Intel |
| Chemed |
Intel and Chemed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Chemed
The main advantage of trading using opposite Intel and Chemed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Chemed 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 Chemed will offset losses from the drop in Chemed's long position.| Intel vs. UNIQA INSURANCE GR | Intel vs. Synchrony Financial | Intel vs. BANKINTER ADR 2007 | Intel vs. Erste Group Bank |
| Chemed vs. Sekisui Chemical Co | Chemed vs. Molson Coors Beverage | Chemed vs. TRI CHEMICAL LABORATINC | Chemed vs. MONEYSUPERMARKET |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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