Correlation Between Intel and Aurora Spine

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

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

Diversification Opportunities for Intel and Aurora Spine

0.66

Correlation Coefficient

Intel  Aurora Spine

Poor diversification

The 3 months correlation between Intel and Aurora is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Aurora Spine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Spine 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 Aurora Spine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Spine has no effect on the direction of Intel i.e., Intel and Aurora Spine go up and down completely randomly.

Pair Corralation between Intel and Aurora Spine

Given the investment horizon of 90 days Intel is expected to generate 1.39 times more return on investment than Aurora Spine. However, Intel is 1.39 times more volatile than Aurora Spine. It trades about 0.01 of its potential returns per unit of risk. Aurora Spine is currently generating about 0.01 per unit of risk. If you would invest  2,252  in Intel on September 5, 2024 and sell it today you would lose (5.00) from holding Intel or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Intel  vs.  Aurora Spine

Intel

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aurora Spine

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aurora Spine are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Aurora Spine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Aurora Spine

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

The idea behind Intel and Aurora Spine 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.