Correlation Between Intel and IShares Healthcare
Can any of the company-specific risk be diversified away by investing in both Intel and IShares Healthcare 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 Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and iShares Healthcare ETF, you can compare the effects of market volatilities on Intel and IShares Healthcare 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 Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and IShares Healthcare.
Diversification Opportunities for Intel and IShares Healthcare
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intel and IShares is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Intel and iShares Healthcare ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Healthcare ETF 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 Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Healthcare ETF has no effect on the direction of Intel i.e., Intel and IShares Healthcare go up and down completely randomly.
Pair Corralation between Intel and IShares Healthcare
Given the investment horizon of 90 days Intel is expected to generate 3.64 times more return on investment than IShares Healthcare. However, Intel is 3.64 times more volatile than iShares Healthcare ETF. It trades about 0.16 of its potential returns per unit of risk. iShares Healthcare ETF is currently generating about 0.15 per unit of risk. If you would invest 2,149 in Intel on November 18, 2024 and sell it today you would earn a total of 211.00 from holding Intel or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. iShares Healthcare ETF
Performance |
| Timeline |
| Intel |
| iShares Healthcare ETF |
Intel and IShares Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and IShares Healthcare
The main advantage of trading using opposite Intel and IShares Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, IShares Healthcare 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 Healthcare will offset losses from the drop in IShares Healthcare's long position.| Intel vs. Diodes Incorporated | Intel vs. Daqo New Energy | Intel vs. Micron Technology | Intel vs. MagnaChip Semiconductor |
| IShares Healthcare vs. iShares Financials ETF | IShares Healthcare vs. iShares Consumer Discretionary | IShares Healthcare vs. iShares Industrials ETF | IShares Healthcare vs. iShares Consumer Staples |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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