Correlation Between Intel and Laramide Resources
Can any of the company-specific risk be diversified away by investing in both Intel and Laramide Resources 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 Laramide Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Laramide Resources, you can compare the effects of market volatilities on Intel and Laramide Resources 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 Laramide Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Laramide Resources.
Diversification Opportunities for Intel and Laramide Resources
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and Laramide is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Laramide Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laramide Resources 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 Laramide Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laramide Resources has no effect on the direction of Intel i.e., Intel and Laramide Resources go up and down completely randomly.
Pair Corralation between Intel and Laramide Resources
Given the investment horizon of 90 days Intel is expected to generate 1.17 times more return on investment than Laramide Resources. However, Intel is 1.17 times more volatile than Laramide Resources. It trades about 0.08 of its potential returns per unit of risk. Laramide Resources is currently generating about -0.01 per unit of risk. If you would invest 2,292 in Intel on August 29, 2024 and sell it today you would earn a total of 113.00 from holding Intel or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Laramide Resources
Performance |
| Timeline |
| Intel |
| Laramide Resources |
Intel and Laramide Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Laramide Resources
The main advantage of trading using opposite Intel and Laramide Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Laramide Resources 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 Laramide Resources will offset losses from the drop in Laramide Resources' long position.The idea behind Intel and Laramide Resources 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.| Laramide Resources vs. Petroleo Brasileiro Petrobras | Laramide Resources vs. Equinor ASA ADR | Laramide Resources vs. Eni SpA ADR | Laramide Resources vs. YPF Sociedad Anonima |
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 Directory module to find actively traded commodities issued by global exchanges.
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