Correlation Between Intel and MicroSectors Solactive
Can any of the company-specific risk be diversified away by investing in both Intel and MicroSectors Solactive 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 MicroSectors Solactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and MicroSectors Solactive FANG, you can compare the effects of market volatilities on Intel and MicroSectors Solactive 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 MicroSectors Solactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and MicroSectors Solactive.
Diversification Opportunities for Intel and MicroSectors Solactive
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Intel and MicroSectors is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Intel and MicroSectors Solactive FANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors Solactive 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 MicroSectors Solactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors Solactive has no effect on the direction of Intel i.e., Intel and MicroSectors Solactive go up and down completely randomly.
Pair Corralation between Intel and MicroSectors Solactive
Given the investment horizon of 90 days Intel is expected to generate 0.84 times more return on investment than MicroSectors Solactive. However, Intel is 1.19 times less risky than MicroSectors Solactive. It trades about 0.17 of its potential returns per unit of risk. MicroSectors Solactive FANG is currently generating about -0.23 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. MicroSectors Solactive FANG
Performance |
| Timeline |
| Intel |
| MicroSectors Solactive |
Intel and MicroSectors Solactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and MicroSectors Solactive
The main advantage of trading using opposite Intel and MicroSectors Solactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, MicroSectors Solactive 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 MicroSectors Solactive will offset losses from the drop in MicroSectors Solactive's long position.| Intel vs. NXP Semiconductors NV | Intel vs. Microchip Technology | Intel vs. Monolithic Power Systems | Intel vs. ON Semiconductor |
| MicroSectors Solactive vs. Direxion Daily Dow | MicroSectors Solactive vs. MicroSectors Solactive FANG | MicroSectors Solactive vs. MicroSectors FANG Index |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |