Correlation Between Telecom Argentina and Intel Corp
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Intel Corp 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 Telecom Argentina and Intel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and Intel Corp CEDEAR, you can compare the effects of market volatilities on Telecom Argentina and Intel Corp 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 Telecom Argentina with a short position of Intel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Intel Corp.
Diversification Opportunities for Telecom Argentina and Intel Corp
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telecom and Intel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Intel Corp CEDEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel Corp CEDEAR and Telecom Argentina 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 Telecom Argentina are associated (or correlated) with Intel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel Corp CEDEAR has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Intel Corp go up and down completely randomly.
Pair Corralation between Telecom Argentina and Intel Corp
Assuming the 90 days trading horizon Telecom Argentina is expected to generate 1.35 times more return on investment than Intel Corp. However, Telecom Argentina is 1.35 times more volatile than Intel Corp CEDEAR. It trades about 0.15 of its potential returns per unit of risk. Intel Corp CEDEAR is currently generating about -0.48 per unit of risk. If you would invest 260,500 in Telecom Argentina on September 12, 2024 and sell it today you would earn a total of 28,000 from holding Telecom Argentina or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telecom Argentina vs. Intel Corp CEDEAR
Performance |
| Timeline |
| Telecom Argentina |
| Intel Corp CEDEAR |
Telecom Argentina and Intel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Intel Corp
The main advantage of trading using opposite Telecom Argentina and Intel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Intel Corp 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 Intel Corp will offset losses from the drop in Intel Corp's long position.| Telecom Argentina vs. Grupo Televisa SAB | Telecom Argentina vs. Cablevision Holding SA | Telecom Argentina vs. Edesa Holding SA | Telecom Argentina vs. Vista Energy, SAB |
| Intel Corp vs. NVIDIA | Intel Corp vs. Edesa Holding SA | Intel Corp vs. Longvie SA | Intel Corp vs. Vista Energy, SAB |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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