Correlation Between Intel and Nationwide
Can any of the company-specific risk be diversified away by investing in both Intel and Nationwide 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 Nationwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Nationwide, you can compare the effects of market volatilities on Intel and Nationwide 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 Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Nationwide.
Diversification Opportunities for Intel and Nationwide
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and Nationwide is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Nationwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide 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 Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide has no effect on the direction of Intel i.e., Intel and Nationwide go up and down completely randomly.
Pair Corralation between Intel and Nationwide
If you would invest 2,290 in Intel on August 30, 2024 and sell it today you would earn a total of 75.00 from holding Intel or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Intel vs. Nationwide
Performance |
| Timeline |
| Intel |
| Nationwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intel and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Nationwide
The main advantage of trading using opposite Intel and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Nationwide 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 Nationwide will offset losses from the drop in Nationwide's long position.The idea behind Intel and Nationwide 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.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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