Correlation Between Intel and PHLX Oil
Can any of the company-specific risk be diversified away by investing in both Intel and PHLX Oil 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 PHLX Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and PHLX Oil Service, you can compare the effects of market volatilities on Intel and PHLX Oil 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 PHLX Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and PHLX Oil.
Diversification Opportunities for Intel and PHLX Oil
Poor diversification
The 3 months correlation between Intel and PHLX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Intel and PHLX Oil Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHLX Oil Service 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 PHLX Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHLX Oil Service has no effect on the direction of Intel i.e., Intel and PHLX Oil go up and down completely randomly.
Pair Corralation between Intel and PHLX Oil
Given the investment horizon of 90 days Intel is expected to under-perform the PHLX Oil. In addition to that, Intel is 1.89 times more volatile than PHLX Oil Service. It trades about -0.08 of its total potential returns per unit of risk. PHLX Oil Service is currently generating about -0.01 per unit of volatility. If you would invest 7,867 in PHLX Oil Service on November 3, 2024 and sell it today you would lose (611.00) from holding PHLX Oil Service or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Intel vs. PHLX Oil Service
Performance |
| Timeline |
Intel and PHLX Oil Volatility Contrast
Predicted Return Density |
| Returns |
Intel
Pair trading matchups for Intel
PHLX Oil Service
Pair trading matchups for PHLX Oil
Pair Trading with Intel and PHLX Oil
The main advantage of trading using opposite Intel and PHLX Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, PHLX Oil 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 PHLX Oil will offset losses from the drop in PHLX Oil's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| PHLX Oil vs. Universal Music Group | PHLX Oil vs. Harmony Gold Mining | PHLX Oil vs. Summit Materials | PHLX Oil vs. Perseus Mining Limited |
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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