Correlation Between Intel and United Utilities
Can any of the company-specific risk be diversified away by investing in both Intel and United Utilities 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 United Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and United Utilities Group, you can compare the effects of market volatilities on Intel and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and United Utilities.
Diversification Opportunities for Intel and United Utilities
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intel and United is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intel and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Intel i.e., Intel and United Utilities go up and down completely randomly.
Pair Corralation between Intel and United Utilities
Assuming the 90 days trading horizon Intel is expected to under-perform the United Utilities. In addition to that, Intel is 1.87 times more volatile than United Utilities Group. It trades about -0.03 of its total potential returns per unit of risk. United Utilities Group is currently generating about 0.04 per unit of volatility. If you would invest 1,184 in United Utilities Group on September 1, 2024 and sell it today you would earn a total of 166.00 from holding United Utilities Group or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. United Utilities Group
Performance |
| Timeline |
| Intel |
| United Utilities |
Intel and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and United Utilities
The main advantage of trading using opposite Intel and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Intel vs. PARKEN Sport Entertainment | Intel vs. ARDAGH METAL PACDL 0001 | Intel vs. Columbia Sportswear | Intel vs. POWER METALS |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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