Correlation Between Intel and QUALCOMM Incorporated

Can any of the company-specific risk be diversified away by investing in both Intel and QUALCOMM Incorporated 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 QUALCOMM Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and QUALCOMM Incorporated, you can compare the effects of market volatilities on Intel and QUALCOMM Incorporated 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 QUALCOMM Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and QUALCOMM Incorporated.

Diversification Opportunities for Intel and QUALCOMM Incorporated

0.39

Correlation Coefficient

Intel  QUALCOMM Incorporated

Weak diversification

The 3 months correlation between Intel and QUALCOMM is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intel and QUALCOMM Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALCOMM Incorporated 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 QUALCOMM Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALCOMM Incorporated has no effect on the direction of Intel i.e., Intel and QUALCOMM Incorporated go up and down completely randomly.

Pair Corralation between Intel and QUALCOMM Incorporated

Assuming the 90 days trading horizon Intel is expected to under-perform the QUALCOMM Incorporated. In addition to that, Intel is 1.32 times more volatile than QUALCOMM Incorporated. It trades about -0.05 of its total potential returns per unit of risk. QUALCOMM Incorporated is currently generating about -0.02 per unit of volatility. If you would invest  320,331  in QUALCOMM Incorporated on September 24, 2024 and sell it today you would lose (14,831) from holding QUALCOMM Incorporated or give up 4.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  QUALCOMM Incorporated

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

QUALCOMM Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QUALCOMM Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, QUALCOMM Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and QUALCOMM Incorporated

The main advantage of trading using opposite Intel and QUALCOMM Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, QUALCOMM Incorporated 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 QUALCOMM Incorporated will offset losses from the drop in QUALCOMM Incorporated's long position.

The idea behind Intel and QUALCOMM Incorporated 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.