Correlation Between Intel and Daqo New
Can any of the company-specific risk be diversified away by investing in both Intel and Daqo New 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 Daqo New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Daqo New Energy, you can compare the effects of market volatilities on Intel and Daqo New 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 Daqo New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Daqo New.
Diversification Opportunities for Intel and Daqo New
Poor diversification
The 3 months correlation between Intel and Daqo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Daqo New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daqo New Energy 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 Daqo New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daqo New Energy has no effect on the direction of Intel i.e., Intel and Daqo New go up and down completely randomly.
Pair Corralation between Intel and Daqo New
Given the investment horizon of 90 days Intel is expected to generate 0.71 times more return on investment than Daqo New. However, Intel is 1.42 times less risky than Daqo New. It trades about 0.01 of its potential returns per unit of risk. Daqo New Energy is currently generating about -0.03 per unit of risk. If you would invest 2,758 in Intel on August 27, 2024 and sell it today you would lose (308.00) from holding Intel or give up 11.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Daqo New Energy
Performance |
| Timeline |
| Intel |
| Daqo New Energy |
Intel and Daqo New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Daqo New
The main advantage of trading using opposite Intel and Daqo New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Daqo New 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 Daqo New will offset losses from the drop in Daqo New's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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