Correlation Between INTEL CDR and Choice Properties

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

By analyzing existing cross correlation between INTEL CDR and Choice Properties Real, you can compare the effects of market volatilities on INTEL CDR and Choice Properties 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 CDR with a short position of Choice Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTEL CDR and Choice Properties.

Diversification Opportunities for INTEL CDR and Choice Properties

-0.63

Correlation Coefficient

INTEL CDR  Choice Properties

Excellent diversification

The 3 months correlation between INTEL and Choice is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and Choice Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Properties Real and INTEL CDR 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 CDR are associated (or correlated) with Choice Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Properties Real has no effect on the direction of INTEL CDR i.e., INTEL CDR and Choice Properties go up and down completely randomly.

Pair Corralation between INTEL CDR and Choice Properties

Assuming the 90 days trading horizon INTEL CDR is expected to generate 3.08 times more return on investment than Choice Properties. However, INTEL CDR is 3.08 times more volatile than Choice Properties Real. It trades about 0.11 of its potential returns per unit of risk. Choice Properties Real is currently generating about -0.09 per unit of risk. If you would invest  1,189  in INTEL CDR on September 3, 2024 and sell it today you would earn a total of  225.00  from holding INTEL CDR or generate 18.92% return on investment over 90 days.

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

INTEL CDR  vs.  Choice Properties Real

INTEL CDR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INTEL CDR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, INTEL CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Choice Properties Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choice Properties Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Choice Properties 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 CDR and Choice Properties

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

The idea behind INTEL CDR and Choice Properties Real 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.