Correlation Between Intel and American Funds
Can any of the company-specific risk be diversified away by investing in both Intel and American Funds 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 American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and American Funds Amcap, you can compare the effects of market volatilities on Intel and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and American Funds.
Diversification Opportunities for Intel and American Funds
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intel and American is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Intel and American Funds Amcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Amcap 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Amcap has no effect on the direction of Intel i.e., Intel and American Funds go up and down completely randomly.
Pair Corralation between Intel and American Funds
Given the investment horizon of 90 days Intel is expected to generate 3.69 times more return on investment than American Funds. However, Intel is 3.69 times more volatile than American Funds Amcap. It trades about 0.16 of its potential returns per unit of risk. American Funds Amcap is currently generating about 0.09 per unit of risk. If you would invest 2,198 in Intel on August 24, 2024 and sell it today you would earn a total of 246.00 from holding Intel or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. American Funds Amcap
Performance |
| Timeline |
| Intel |
| American Funds Amcap |
Intel and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and American Funds
The main advantage of trading using opposite Intel and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| American Funds vs. Gamco Global Telecommunications | American Funds vs. California High Yield Municipal | American Funds vs. Transamerica Intermediate Muni | American Funds vs. Rbc Funds Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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