Correlation Between Intel and Sprott Energy
Can any of the company-specific risk be diversified away by investing in both Intel and Sprott Energy 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 Sprott Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Sprott Energy Transition, you can compare the effects of market volatilities on Intel and Sprott Energy 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 Sprott Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Sprott Energy.
Diversification Opportunities for Intel and Sprott Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and Sprott is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Sprott Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Energy Transition 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 Sprott Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Energy Transition has no effect on the direction of Intel i.e., Intel and Sprott Energy go up and down completely randomly.
Pair Corralation between Intel and Sprott Energy
Given the investment horizon of 90 days Intel is expected to generate 1.87 times more return on investment than Sprott Energy. However, Intel is 1.87 times more volatile than Sprott Energy Transition. It trades about 0.13 of its potential returns per unit of risk. Sprott Energy Transition is currently generating about -0.08 per unit of risk. If you would invest 2,292 in Intel on August 28, 2024 and sell it today you would earn a total of 195.00 from holding Intel or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Sprott Energy Transition
Performance |
| Timeline |
| Intel |
| Sprott Energy Transition |
Intel and Sprott Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Sprott Energy
The main advantage of trading using opposite Intel and Sprott Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Sprott Energy 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 Sprott Energy will offset losses from the drop in Sprott Energy's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| Sprott Energy vs. Sprott Lithium Miners | Sprott Energy vs. Sprott Junior Copper | Sprott Energy vs. Sprott Junior Uranium | Sprott Energy vs. Sprott Nickel Miners |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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