Correlation Between Intel and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Intel and SPDR SP 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 SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and SPDR SP North, you can compare the effects of market volatilities on Intel and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and SPDR SP.
Diversification Opportunities for Intel and SPDR SP
Poor diversification
The 3 months correlation between Intel and SPDR is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Intel and SPDR SP North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP North 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP North has no effect on the direction of Intel i.e., Intel and SPDR SP go up and down completely randomly.
Pair Corralation between Intel and SPDR SP
Given the investment horizon of 90 days Intel is expected to under-perform the SPDR SP. In addition to that, Intel is 3.57 times more volatile than SPDR SP North. It trades about -0.03 of its total potential returns per unit of risk. SPDR SP North is currently generating about 0.04 per unit of volatility. If you would invest 5,475 in SPDR SP North on September 3, 2024 and sell it today you would earn a total of 291.00 from holding SPDR SP North or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. SPDR SP North
Performance |
| Timeline |
| Intel |
| SPDR SP North |
Intel and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and SPDR SP
The main advantage of trading using opposite Intel and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| SPDR SP vs. Vanguard Industrials Index | SPDR SP vs. Vanguard Communication Services | SPDR SP vs. Vanguard Consumer Discretionary | SPDR SP vs. Vanguard 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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