Correlation Between Intel and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Intel and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Intel and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and IMPERIAL TOBACCO.
Diversification Opportunities for Intel and IMPERIAL TOBACCO
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and IMPERIAL is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Intel and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Intel i.e., Intel and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Intel and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Intel is expected to generate 3.98 times more return on investment than IMPERIAL TOBACCO. However, Intel is 3.98 times more volatile than IMPERIAL TOBACCO . It trades about 0.23 of its potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.44 per unit of risk. If you would invest 2,106 in Intel on November 22, 2024 and sell it today you would earn a total of 373.00 from holding Intel or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| Intel |
| IMPERIAL TOBACCO |
Intel and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and IMPERIAL TOBACCO
The main advantage of trading using opposite Intel and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Intel vs. FONIX MOBILE PLC | Intel vs. WillScot Mobile Mini | Intel vs. Infrastrutture Wireless Italiane | Intel vs. Khiron Life Sciences |
| IMPERIAL TOBACCO vs. UNITED RENTALS | IMPERIAL TOBACCO vs. ALBIS LEASING AG | IMPERIAL TOBACCO vs. VIVA WINE GROUP | IMPERIAL TOBACCO vs. SOLSTAD OFFSHORE NK |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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