Correlation Between Intel and Allied Corp
Can any of the company-specific risk be diversified away by investing in both Intel and Allied Corp 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 Allied Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Allied Corp, you can compare the effects of market volatilities on Intel and Allied Corp 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 Allied Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Allied Corp.
Diversification Opportunities for Intel and Allied Corp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and Allied is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Allied Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Corp 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 Allied Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Corp has no effect on the direction of Intel i.e., Intel and Allied Corp go up and down completely randomly.
Pair Corralation between Intel and Allied Corp
Given the investment horizon of 90 days Intel is expected to generate 0.32 times more return on investment than Allied Corp. However, Intel is 3.12 times less risky than Allied Corp. It trades about 0.17 of its potential returns per unit of risk. Allied Corp is currently generating about -0.09 per unit of risk. If you would invest 2,152 in Intel on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Intel or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Allied Corp
Performance |
| Timeline |
| Intel |
| Allied Corp |
Intel and Allied Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Allied Corp
The main advantage of trading using opposite Intel and Allied Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Allied Corp 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 Allied Corp will offset losses from the drop in Allied Corp's long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| Allied Corp vs. Holloman Energy Corp | Allied Corp vs. cbdMD Inc | Allied Corp vs. Evolus Inc | Allied Corp vs. CV Sciences |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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