Correlation Between Intel and Exelixis
Can any of the company-specific risk be diversified away by investing in both Intel and Exelixis 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 Exelixis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Exelixis, you can compare the effects of market volatilities on Intel and Exelixis 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 Exelixis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Exelixis.
Diversification Opportunities for Intel and Exelixis
Poor diversification
The 3 months correlation between Intel and Exelixis is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Exelixis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelixis 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 Exelixis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelixis has no effect on the direction of Intel i.e., Intel and Exelixis go up and down completely randomly.
Pair Corralation between Intel and Exelixis
Given the investment horizon of 90 days Intel is expected to generate 1.88 times less return on investment than Exelixis. In addition to that, Intel is 1.13 times more volatile than Exelixis. It trades about 0.11 of its total potential returns per unit of risk. Exelixis is currently generating about 0.23 per unit of volatility. If you would invest 2,583 in Exelixis on August 31, 2024 and sell it today you would earn a total of 1,010 from holding Exelixis or generate 39.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Exelixis
Performance |
| Timeline |
| Intel |
| Exelixis |
Intel and Exelixis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Exelixis
The main advantage of trading using opposite Intel and Exelixis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Exelixis 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 Exelixis will offset losses from the drop in Exelixis' long position.The idea behind Intel and Exelixis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Exelixis vs. TG Therapeutics | Exelixis vs. Viking Therapeutics | Exelixis vs. Madrigal Pharmaceuticals | Exelixis vs. BioXcel Therapeutics |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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