Correlation Between INTEL CDR and Forum Energy
Can any of the company-specific risk be diversified away by investing in both INTEL CDR and Forum Energy 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 CDR and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTEL CDR and Forum Energy Metals, you can compare the effects of market volatilities on INTEL CDR and Forum Energy 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 CDR with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTEL CDR and Forum Energy.
Diversification Opportunities for INTEL CDR and Forum Energy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INTEL and Forum is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and Forum Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Metals and INTEL CDR 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 CDR are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Metals has no effect on the direction of INTEL CDR i.e., INTEL CDR and Forum Energy go up and down completely randomly.
Pair Corralation between INTEL CDR and Forum Energy
Assuming the 90 days trading horizon INTEL CDR is expected to generate 0.25 times more return on investment than Forum Energy. However, INTEL CDR is 3.99 times less risky than Forum Energy. It trades about -0.05 of its potential returns per unit of risk. Forum Energy Metals is currently generating about -0.03 per unit of risk. If you would invest 1,187 in INTEL CDR on November 3, 2024 and sell it today you would lose (46.00) from holding INTEL CDR or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTEL CDR vs. Forum Energy Metals
Performance |
| Timeline |
| INTEL CDR |
| Forum Energy Metals |
INTEL CDR and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTEL CDR and Forum Energy
The main advantage of trading using opposite INTEL CDR and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTEL CDR position performs unexpectedly, Forum Energy 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 Forum Energy will offset losses from the drop in Forum Energy's long position.| INTEL CDR vs. Plaza Retail REIT | INTEL CDR vs. BluMetric Environmental | INTEL CDR vs. Renoworks Software | INTEL CDR vs. Profound Medical Corp |
| Forum Energy vs. Wildsky Resources | Forum Energy vs. Golden Pursuit Resources | Forum Energy vs. ExGen Resources | Forum Energy vs. Fidelity Minerals Corp |
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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