Correlation Between Intel and Canaan
Can any of the company-specific risk be diversified away by investing in both Intel and Canaan 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 Canaan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Canaan Inc, you can compare the effects of market volatilities on Intel and Canaan 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 Canaan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Canaan.
Diversification Opportunities for Intel and Canaan
Poor diversification
The 3 months correlation between Intel and Canaan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Canaan Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaan Inc 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 Canaan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaan Inc has no effect on the direction of Intel i.e., Intel and Canaan go up and down completely randomly.
Pair Corralation between Intel and Canaan
Given the investment horizon of 90 days Intel is expected to generate 7.32 times less return on investment than Canaan. But when comparing it to its historical volatility, Intel is 3.66 times less risky than Canaan. It trades about 0.15 of its potential returns per unit of risk. Canaan Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Canaan Inc on August 24, 2024 and sell it today you would earn a total of 96.00 from holding Canaan Inc or generate 98.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Canaan Inc
Performance |
| Timeline |
| Intel |
| Canaan Inc |
Intel and Canaan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Canaan
The main advantage of trading using opposite Intel and Canaan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Canaan 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 Canaan will offset losses from the drop in Canaan's long position.| Intel vs. Eshallgo Class A | Intel vs. Amtech Systems | Intel vs. Gold Fields Ltd | Intel vs. Aegean Airlines SA |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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