Correlation Between Intel and FIBRA Storage

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

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

Diversification Opportunities for Intel and FIBRA Storage

-0.05

Correlation Coefficient

Intel  FIBRA Storage

Good diversification

The 3 months correlation between Intel and FIBRA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Intel and FIBRA Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Storage 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 FIBRA Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Storage has no effect on the direction of Intel i.e., Intel and FIBRA Storage go up and down completely randomly.

Pair Corralation between Intel and FIBRA Storage

Assuming the 90 days trading horizon Intel is expected to under-perform the FIBRA Storage. In addition to that, Intel is 4.21 times more volatile than FIBRA Storage. It trades about -0.06 of its total potential returns per unit of risk. FIBRA Storage is currently generating about 0.35 per unit of volatility. If you would invest  1,550  in FIBRA Storage on September 26, 2024 and sell it today you would earn a total of  238.00  from holding FIBRA Storage or generate 15.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Intel  vs.  FIBRA Storage

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.

FIBRA Storage

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and FIBRA Storage

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

The idea behind Intel and FIBRA Storage 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.