Correlation Between Intel and Athabasca Oil
Can any of the company-specific risk be diversified away by investing in both Intel and Athabasca Oil 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 Athabasca Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Athabasca Oil Corp, you can compare the effects of market volatilities on Intel and Athabasca Oil 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 Athabasca Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Athabasca Oil.
Diversification Opportunities for Intel and Athabasca Oil
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and Athabasca is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Athabasca Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athabasca Oil 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 Athabasca Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athabasca Oil Corp has no effect on the direction of Intel i.e., Intel and Athabasca Oil go up and down completely randomly.
Pair Corralation between Intel and Athabasca Oil
Given the investment horizon of 90 days Intel is expected to generate 1.62 times more return on investment than Athabasca Oil. However, Intel is 1.62 times more volatile than Athabasca Oil Corp. It trades about 0.06 of its potential returns per unit of risk. Athabasca Oil Corp is currently generating about 0.06 per unit of risk. If you would invest 2,290 in Intel on August 30, 2024 and sell it today you would earn a total of 75.00 from holding Intel or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Athabasca Oil Corp
Performance |
| Timeline |
| Intel |
| Athabasca Oil Corp |
Intel and Athabasca Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Athabasca Oil
The main advantage of trading using opposite Intel and Athabasca Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Athabasca Oil 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 Athabasca Oil will offset losses from the drop in Athabasca Oil's long position.The idea behind Intel and Athabasca Oil Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Athabasca Oil vs. Pine Cliff Energy | Athabasca Oil vs. Cardinal Energy | Athabasca Oil vs. Tamarack Valley Energy | Athabasca Oil vs. Saturn Oil Gas |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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