Correlation Between Intel and New York
Can any of the company-specific risk be diversified away by investing in both Intel and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and The New York, you can compare the effects of market volatilities on Intel and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and New York.
Diversification Opportunities for Intel and New York
Poor diversification
The 3 months correlation between Intel and New is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Intel and The New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York has no effect on the direction of Intel i.e., Intel and New York go up and down completely randomly.
Pair Corralation between Intel and New York
Assuming the 90 days trading horizon Intel is expected to under-perform the New York. In addition to that, Intel is 2.2 times more volatile than The New York. It trades about -0.03 of its total potential returns per unit of risk. The New York is currently generating about 0.08 per unit of volatility. If you would invest 3,882 in The New York on September 1, 2024 and sell it today you would earn a total of 1,254 from holding The New York or generate 32.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Intel vs. The New York
Performance |
| Timeline |
| Intel |
| New York |
Intel and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and New York
The main advantage of trading using opposite Intel and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Intel vs. PARKEN Sport Entertainment | Intel vs. ARDAGH METAL PACDL 0001 | Intel vs. Columbia Sportswear | Intel vs. POWER METALS |
| New York vs. SIMS METAL MGT | New York vs. Verizon Communications | New York vs. POWER METALS | New York vs. Citic Telecom International |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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