Correlation Between Intel and Auburn Bancorp
Can any of the company-specific risk be diversified away by investing in both Intel and Auburn Bancorp 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 Auburn Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Auburn Bancorp, you can compare the effects of market volatilities on Intel and Auburn Bancorp 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 Auburn Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Auburn Bancorp.
Diversification Opportunities for Intel and Auburn Bancorp
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intel and Auburn is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Auburn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn Bancorp 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 Auburn Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn Bancorp has no effect on the direction of Intel i.e., Intel and Auburn Bancorp go up and down completely randomly.
Pair Corralation between Intel and Auburn Bancorp
Given the investment horizon of 90 days Intel is expected to generate 1.78 times more return on investment than Auburn Bancorp. However, Intel is 1.78 times more volatile than Auburn Bancorp. It trades about -0.01 of its potential returns per unit of risk. Auburn Bancorp is currently generating about -0.03 per unit of risk. If you would invest 2,946 in Intel on December 5, 2024 and sell it today you would lose (813.00) from holding Intel or give up 27.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Auburn Bancorp
Performance |
| Timeline |
| Intel |
| Auburn Bancorp |
Intel and Auburn Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Auburn Bancorp
The main advantage of trading using opposite Intel and Auburn Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Auburn Bancorp 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 Auburn Bancorp will offset losses from the drop in Auburn Bancorp's long position.| Intel vs. ASE Industrial Holding | ||
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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