Correlation Between Intel and American Century
Can any of the company-specific risk be diversified away by investing in both Intel and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and American Century ETF, you can compare the effects of market volatilities on Intel and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and American Century.
Diversification Opportunities for Intel and American Century
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and American is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Intel and American Century ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century ETF 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century ETF has no effect on the direction of Intel i.e., Intel and American Century go up and down completely randomly.
Pair Corralation between Intel and American Century
Given the investment horizon of 90 days Intel is expected to generate 26.25 times more return on investment than American Century. However, Intel is 26.25 times more volatile than American Century ETF. It trades about 0.13 of its potential returns per unit of risk. American Century ETF is currently generating about -0.05 per unit of risk. If you would invest 2,292 in Intel on August 27, 2024 and sell it today you would earn a total of 195.00 from holding Intel or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. American Century ETF
Performance |
| Timeline |
| Intel |
| American Century ETF |
Intel and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and American Century
The main advantage of trading using opposite Intel and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| American Century vs. Dimensional ETF Trust | American Century vs. Dimensional ETF Trust | American Century vs. Dimensional Core Equity | American Century vs. Dimensional ETF Trust |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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