Correlation Between Intel and New Energy
Can any of the company-specific risk be diversified away by investing in both Intel and New Energy 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 New Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and New Energy Metals, you can compare the effects of market volatilities on Intel and New Energy 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 New Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and New Energy.
Diversification Opportunities for Intel and New Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and New is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intel and New Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Energy Metals 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 New Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Energy Metals has no effect on the direction of Intel i.e., Intel and New Energy go up and down completely randomly.
Pair Corralation between Intel and New Energy
Given the investment horizon of 90 days Intel is expected to generate 26.07 times less return on investment than New Energy. But when comparing it to its historical volatility, Intel is 4.98 times less risky than New Energy. It trades about 0.0 of its potential returns per unit of risk. New Energy Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 207.00 in New Energy Metals on September 1, 2024 and sell it today you would lose (176.00) from holding New Energy Metals or give up 85.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. New Energy Metals
Performance |
| Timeline |
| Intel |
| New Energy Metals |
Intel and New Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and New Energy
The main advantage of trading using opposite Intel and New Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, New Energy 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 New Energy will offset losses from the drop in New Energy's long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| New Energy vs. Legacy Education | New Energy vs. Apple Inc | New Energy vs. NVIDIA | New Energy vs. Microsoft |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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