Correlation Between Intel and American Century
Can any of the company-specific risk be diversified away by investing in both Intel and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and American Century Quality, you can compare the effects of market volatilities on Intel and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and American Century.
Diversification Opportunities for Intel and American Century
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intel and American is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Intel and American Century Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Quality 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Quality has no effect on the direction of Intel i.e., Intel and American Century go up and down completely randomly.
Pair Corralation between Intel and American Century
Given the investment horizon of 90 days Intel is expected to generate 4.65 times more return on investment than American Century. However, Intel is 4.65 times more volatile than American Century Quality. It trades about 0.14 of its potential returns per unit of risk. American Century Quality is currently generating about -0.08 per unit of risk. If you would invest 2,029 in Intel on November 28, 2024 and sell it today you would earn a total of 270.00 from holding Intel or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. American Century Quality
Performance |
| Timeline |
| Intel |
| American Century Quality |
Intel and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and American Century
The main advantage of trading using opposite Intel and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| American Century vs. American Century STOXX | American Century vs. American Century Quality | American Century vs. Nuveen ESG Large Cap | American Century vs. Invesco SP 500 |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |