Correlation Between Intel and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Intel and Old Westbury 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 Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Old Westbury Small, you can compare the effects of market volatilities on Intel and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Old Westbury.
Diversification Opportunities for Intel and Old Westbury
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intel and Old is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Old Westbury Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Small 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Small has no effect on the direction of Intel i.e., Intel and Old Westbury go up and down completely randomly.
Pair Corralation between Intel and Old Westbury
Given the investment horizon of 90 days Intel is expected to generate 2.11 times less return on investment than Old Westbury. In addition to that, Intel is 3.43 times more volatile than Old Westbury Small. It trades about 0.01 of its total potential returns per unit of risk. Old Westbury Small is currently generating about 0.06 per unit of volatility. If you would invest 1,390 in Old Westbury Small on August 28, 2024 and sell it today you would earn a total of 343.00 from holding Old Westbury Small or generate 24.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Old Westbury Small
Performance |
| Timeline |
| Intel |
| Old Westbury Small |
Intel and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Old Westbury
The main advantage of trading using opposite Intel and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| Old Westbury vs. Aqr Large Cap | Old Westbury vs. Tax Managed Large Cap | Old Westbury vs. Touchstone Large Cap | Old Westbury vs. Federated Mdt Large |
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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