Correlation Between Intel and Man Wah
Can any of the company-specific risk be diversified away by investing in both Intel and Man Wah 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 Man Wah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Man Wah Holdings, you can compare the effects of market volatilities on Intel and Man Wah 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 Man Wah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Man Wah.
Diversification Opportunities for Intel and Man Wah
Very weak diversification
The 3 months correlation between Intel and Man is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Man Wah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Man Wah Holdings 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 Man Wah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Man Wah Holdings has no effect on the direction of Intel i.e., Intel and Man Wah go up and down completely randomly.
Pair Corralation between Intel and Man Wah
Given the investment horizon of 90 days Intel is expected to generate 0.83 times more return on investment than Man Wah. However, Intel is 1.21 times less risky than Man Wah. It trades about 0.09 of its potential returns per unit of risk. Man Wah Holdings is currently generating about -0.32 per unit of risk. If you would invest 2,230 in Intel on August 31, 2024 and sell it today you would earn a total of 135.00 from holding Intel or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Man Wah Holdings
Performance |
| Timeline |
| Intel |
| Man Wah Holdings |
Intel and Man Wah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Man Wah
The main advantage of trading using opposite Intel and Man Wah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Man Wah 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 Man Wah will offset losses from the drop in Man Wah's long position.The idea behind Intel and Man Wah Holdings 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.| Man Wah vs. La Z Boy Incorporated | Man Wah vs. MasterBrand | Man Wah vs. MillerKnoll | Man Wah vs. Flexsteel Industries |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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