Correlation Between Intel and SunHydrogen

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

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

Diversification Opportunities for Intel and SunHydrogen

-0.52

Correlation Coefficient

Intel  SunHydrogen

Excellent diversification

The 3 months correlation between Intel and SunHydrogen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Intel and SunHydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunHydrogen 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 SunHydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunHydrogen has no effect on the direction of Intel i.e., Intel and SunHydrogen go up and down completely randomly.

Pair Corralation between Intel and SunHydrogen

Given the investment horizon of 90 days Intel is expected to under-perform the SunHydrogen. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 2.26 times less risky than SunHydrogen. The stock trades about -0.07 of its potential returns per unit of risk. The SunHydrogen is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1.30  in SunHydrogen on September 4, 2024 and sell it today you would earn a total of  0.98  from holding SunHydrogen or generate 75.38% return on investment over 90 days.

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

Intel  vs.  SunHydrogen

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.

SunHydrogen

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SunHydrogen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, SunHydrogen reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and SunHydrogen

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

The idea behind Intel and SunHydrogen 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.