Correlation Between Intel and Overlay Shares
Can any of the company-specific risk be diversified away by investing in both Intel and Overlay Shares 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 Overlay Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Overlay Shares Hedged, you can compare the effects of market volatilities on Intel and Overlay Shares 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 Overlay Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Overlay Shares.
Diversification Opportunities for Intel and Overlay Shares
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Intel and Overlay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Overlay Shares Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overlay Shares Hedged 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 Overlay Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overlay Shares Hedged has no effect on the direction of Intel i.e., Intel and Overlay Shares go up and down completely randomly.
Pair Corralation between Intel and Overlay Shares
Given the investment horizon of 90 days Intel is expected to generate 5.55 times more return on investment than Overlay Shares. However, Intel is 5.55 times more volatile than Overlay Shares Hedged. It trades about 0.07 of its potential returns per unit of risk. Overlay Shares Hedged is currently generating about 0.31 per unit of risk. If you would invest 2,320 in Intel on September 2, 2024 and sell it today you would earn a total of 85.00 from holding Intel or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Overlay Shares Hedged
Performance |
| Timeline |
| Intel |
| Overlay Shares Hedged |
Intel and Overlay Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Overlay Shares
The main advantage of trading using opposite Intel and Overlay Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Overlay Shares 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 Overlay Shares will offset losses from the drop in Overlay Shares' long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| Overlay Shares vs. Listed Funds Trust | Overlay Shares vs. Overlay Shares Core | Overlay Shares vs. Overlay Shares Large | Overlay Shares vs. Overlay Shares Municipal |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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