Correlation Between Intel and IShares Global
Can any of the company-specific risk be diversified away by investing in both Intel and IShares Global 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 IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and iShares Global Financials, you can compare the effects of market volatilities on Intel and IShares Global 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 IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and IShares Global.
Diversification Opportunities for Intel and IShares Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intel and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Intel and iShares Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Financials 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Financials has no effect on the direction of Intel i.e., Intel and IShares Global go up and down completely randomly.
Pair Corralation between Intel and IShares Global
Given the investment horizon of 90 days Intel is expected to generate 3.47 times more return on investment than IShares Global. However, Intel is 3.47 times more volatile than iShares Global Financials. It trades about 0.15 of its potential returns per unit of risk. iShares Global Financials is currently generating about 0.2 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 239.00 from holding Intel or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. iShares Global Financials
Performance |
| Timeline |
| Intel |
| iShares Global Financials |
Intel and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and IShares Global
The main advantage of trading using opposite Intel and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| Intel vs. Eshallgo Class A | Intel vs. Amtech Systems | Intel vs. Gold Fields Ltd | Intel vs. Aegean Airlines SA |
| IShares Global vs. iShares Global Comm | IShares Global vs. iShares Global Healthcare | IShares Global vs. iShares Global Tech | IShares Global vs. iShares Financial Services |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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