Correlation Between Advanced Micro and Intel
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Intel 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 Advanced Micro and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Intel, you can compare the effects of market volatilities on Advanced Micro and Intel 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 Advanced Micro with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Intel.
Diversification Opportunities for Advanced Micro and Intel
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advanced and Intel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Advanced Micro i.e., Advanced Micro and Intel go up and down completely randomly.
Pair Corralation between Advanced Micro and Intel
Assuming the 90 days trading horizon Advanced Micro Devices is expected to under-perform the Intel. But the stock apears to be less risky and, when comparing its historical volatility, Advanced Micro Devices is 1.13 times less risky than Intel. The stock trades about -0.09 of its potential returns per unit of risk. The Intel is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,080 in Intel on September 24, 2024 and sell it today you would lose (111.00) from holding Intel or give up 5.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Advanced Micro Devices vs. Intel
Performance |
Timeline |
Advanced Micro Devices |
Intel |
Advanced Micro and Intel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advanced Micro and Intel
The main advantage of trading using opposite Advanced Micro and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Intel 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 will offset losses from the drop in Intel's long position.Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. NVIDIA | Advanced Micro vs. Broadcom | Advanced Micro vs. Texas Instruments Incorporated |
Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. NVIDIA | Intel vs. Broadcom | Intel vs. Texas Instruments Incorporated |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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