Correlation Between Intel and Thunderstruck Resources
Can any of the company-specific risk be diversified away by investing in both Intel and Thunderstruck Resources 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 Thunderstruck Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Thunderstruck Resources, you can compare the effects of market volatilities on Intel and Thunderstruck Resources 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 Thunderstruck Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Thunderstruck Resources.
Diversification Opportunities for Intel and Thunderstruck Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and Thunderstruck is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Thunderstruck Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderstruck Resources 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 Thunderstruck Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderstruck Resources has no effect on the direction of Intel i.e., Intel and Thunderstruck Resources go up and down completely randomly.
Pair Corralation between Intel and Thunderstruck Resources
Given the investment horizon of 90 days Intel is expected to generate 8.2 times less return on investment than Thunderstruck Resources. But when comparing it to its historical volatility, Intel is 12.03 times less risky than Thunderstruck Resources. It trades about 0.17 of its potential returns per unit of risk. Thunderstruck Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Thunderstruck Resources on September 1, 2024 and sell it today you would lose (0.75) from holding Thunderstruck Resources or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Intel vs. Thunderstruck Resources
Performance |
| Timeline |
| Intel |
| Thunderstruck Resources |
Intel and Thunderstruck Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Thunderstruck Resources
The main advantage of trading using opposite Intel and Thunderstruck Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Thunderstruck Resources 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 Thunderstruck Resources will offset losses from the drop in Thunderstruck Resources' long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| Thunderstruck Resources vs. ATT Inc | Thunderstruck Resources vs. Merck Company | Thunderstruck Resources vs. Walt Disney | Thunderstruck Resources vs. Caterpillar |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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