Correlation Between Intel and NewAmsterdam Pharma
Can any of the company-specific risk be diversified away by investing in both Intel and NewAmsterdam Pharma 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 NewAmsterdam Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and NewAmsterdam Pharma, you can compare the effects of market volatilities on Intel and NewAmsterdam Pharma 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 NewAmsterdam Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and NewAmsterdam Pharma.
Diversification Opportunities for Intel and NewAmsterdam Pharma
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and NewAmsterdam is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Intel and NewAmsterdam Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewAmsterdam Pharma 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 NewAmsterdam Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewAmsterdam Pharma has no effect on the direction of Intel i.e., Intel and NewAmsterdam Pharma go up and down completely randomly.
Pair Corralation between Intel and NewAmsterdam Pharma
Given the investment horizon of 90 days Intel is expected to generate 1.5 times less return on investment than NewAmsterdam Pharma. But when comparing it to its historical volatility, Intel is 1.59 times less risky than NewAmsterdam Pharma. It trades about 0.17 of its potential returns per unit of risk. NewAmsterdam Pharma is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,702 in NewAmsterdam Pharma on September 1, 2024 and sell it today you would earn a total of 283.00 from holding NewAmsterdam Pharma or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. NewAmsterdam Pharma
Performance |
| Timeline |
| Intel |
| NewAmsterdam Pharma |
Intel and NewAmsterdam Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and NewAmsterdam Pharma
The main advantage of trading using opposite Intel and NewAmsterdam Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, NewAmsterdam Pharma 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 NewAmsterdam Pharma will offset losses from the drop in NewAmsterdam Pharma's long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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