Correlation Between Intel and Solid Biosciences
Can any of the company-specific risk be diversified away by investing in both Intel and Solid Biosciences 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 Solid Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Solid Biosciences LLC, you can compare the effects of market volatilities on Intel and Solid Biosciences 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 Solid Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Solid Biosciences.
Diversification Opportunities for Intel and Solid Biosciences
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and Solid is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Solid Biosciences LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solid Biosciences LLC 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 Solid Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solid Biosciences LLC has no effect on the direction of Intel i.e., Intel and Solid Biosciences go up and down completely randomly.
Pair Corralation between Intel and Solid Biosciences
Given the investment horizon of 90 days Intel is expected to generate 0.85 times more return on investment than Solid Biosciences. However, Intel is 1.18 times less risky than Solid Biosciences. It trades about -0.02 of its potential returns per unit of risk. Solid Biosciences LLC is currently generating about -0.19 per unit of risk. If you would invest 2,373 in Intel on December 30, 2024 and sell it today you would lose (102.00) from holding Intel or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Solid Biosciences LLC
Performance |
| Timeline |
| Intel |
| Solid Biosciences LLC |
Intel and Solid Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Solid Biosciences
The main advantage of trading using opposite Intel and Solid Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Solid Biosciences 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 Solid Biosciences will offset losses from the drop in Solid Biosciences' long position.The idea behind Intel and Solid Biosciences LLC 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.| Solid Biosciences vs. Century Therapeutics | ||
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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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