Correlation Between Intel and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Intel and Southern Copper 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 Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Southern Copper, you can compare the effects of market volatilities on Intel and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Southern Copper.
Diversification Opportunities for Intel and Southern Copper
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intel and Southern is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of Intel i.e., Intel and Southern Copper go up and down completely randomly.
Pair Corralation between Intel and Southern Copper
Assuming the 90 days trading horizon Intel is expected to under-perform the Southern Copper. In addition to that, Intel is 1.38 times more volatile than Southern Copper. It trades about -0.05 of its total potential returns per unit of risk. Southern Copper is currently generating about 0.03 per unit of volatility. If you would invest 7,518 in Southern Copper on December 4, 2024 and sell it today you would earn a total of 1,026 from holding Southern Copper or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Southern Copper
Performance |
| Timeline |
| Intel |
| Southern Copper |
Intel and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Southern Copper
The main advantage of trading using opposite Intel and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Intel vs. Ultra Clean Holdings | Intel vs. Eidesvik Offshore ASA | Intel vs. Veolia Environnement SA | Intel vs. Daido Steel Co |
| Southern Copper vs. Penn National Gaming | Southern Copper vs. CITIC Telecom International | Southern Copper vs. Cairo Communication SpA | Southern Copper vs. PLAYMATES TOYS |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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