Correlation Between Intel and Endesa SA
Can any of the company-specific risk be diversified away by investing in both Intel and Endesa SA 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 Endesa SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Endesa SA ADR, you can compare the effects of market volatilities on Intel and Endesa SA 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 Endesa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Endesa SA.
Diversification Opportunities for Intel and Endesa SA
Very good diversification
The 3 months correlation between Intel and Endesa is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Endesa SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endesa SA ADR 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 Endesa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endesa SA ADR has no effect on the direction of Intel i.e., Intel and Endesa SA go up and down completely randomly.
Pair Corralation between Intel and Endesa SA
Given the investment horizon of 90 days Intel is expected to generate 5.1 times less return on investment than Endesa SA. In addition to that, Intel is 2.06 times more volatile than Endesa SA ADR. It trades about 0.0 of its total potential returns per unit of risk. Endesa SA ADR is currently generating about 0.05 per unit of volatility. If you would invest 816.00 in Endesa SA ADR on September 2, 2024 and sell it today you would earn a total of 282.00 from holding Endesa SA ADR or generate 34.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Endesa SA ADR
Performance |
| Timeline |
| Intel |
| Endesa SA ADR |
Intel and Endesa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Endesa SA
The main advantage of trading using opposite Intel and Endesa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Endesa SA 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 Endesa SA will offset losses from the drop in Endesa SA's long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| Endesa SA vs. Equatorial Energia SA | Endesa SA vs. Centrais Electricas Brasileiras | Endesa SA vs. Entergy Texas | Endesa SA vs. IDACORP |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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