Correlation Between Intel and MTN Group
Can any of the company-specific risk be diversified away by investing in both Intel and MTN Group 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 MTN Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and MTN Group Ltd, you can compare the effects of market volatilities on Intel and MTN Group 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 MTN Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and MTN Group.
Diversification Opportunities for Intel and MTN Group
Excellent diversification
The 3 months correlation between Intel and MTN is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Intel and MTN Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group 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 MTN Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of Intel i.e., Intel and MTN Group go up and down completely randomly.
Pair Corralation between Intel and MTN Group
Given the investment horizon of 90 days Intel is expected to under-perform the MTN Group. In addition to that, Intel is 1.25 times more volatile than MTN Group Ltd. It trades about -0.06 of its total potential returns per unit of risk. MTN Group Ltd is currently generating about 0.0 per unit of volatility. If you would invest 476.00 in MTN Group Ltd on September 1, 2024 and sell it today you would lose (23.00) from holding MTN Group Ltd or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Intel vs. MTN Group Ltd
Performance |
| Timeline |
| Intel |
| MTN Group |
Intel and MTN Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and MTN Group
The main advantage of trading using opposite Intel and MTN Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, MTN Group 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 MTN Group will offset losses from the drop in MTN Group's long position.| Intel vs. NXP Semiconductors NV | Intel vs. Monolithic Power Systems | Intel vs. ON Semiconductor | Intel vs. Lattice Semiconductor |
| MTN Group vs. XL Axiata Tbk | MTN Group vs. Telenor ASA ADR | MTN Group vs. KT Corporation | MTN Group vs. Vodacom Group Ltd |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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