Correlation Between Intel and Plum Acquisition
Can any of the company-specific risk be diversified away by investing in both Intel and Plum Acquisition 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 Plum Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Plum Acquisition I, you can compare the effects of market volatilities on Intel and Plum Acquisition 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 Plum Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Plum Acquisition.
Diversification Opportunities for Intel and Plum Acquisition
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intel and Plum is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Plum Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plum Acquisition I 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 Plum Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plum Acquisition I has no effect on the direction of Intel i.e., Intel and Plum Acquisition go up and down completely randomly.
Pair Corralation between Intel and Plum Acquisition
Given the investment horizon of 90 days Intel is expected to generate 1.04 times less return on investment than Plum Acquisition. In addition to that, Intel is 1.2 times more volatile than Plum Acquisition I. It trades about 0.0 of its total potential returns per unit of risk. Plum Acquisition I is currently generating about 0.01 per unit of volatility. If you would invest 1,004 in Plum Acquisition I on August 30, 2024 and sell it today you would lose (62.00) from holding Plum Acquisition I or give up 6.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.52% |
| Values | Daily Returns |
Intel vs. Plum Acquisition I
Performance |
| Timeline |
| Intel |
| Plum Acquisition I |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Intel and Plum Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Plum Acquisition
The main advantage of trading using opposite Intel and Plum Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Plum Acquisition 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 Plum Acquisition will offset losses from the drop in Plum Acquisition's long position.The idea behind Intel and Plum Acquisition I 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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