Correlation Between Intel and IShares IBonds

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

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

Diversification Opportunities for Intel and IShares IBonds

0.83

Correlation Coefficient

Intel  IShares IBonds

Very poor diversification

The 3 months correlation between Intel and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Intel and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec 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 IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of Intel i.e., Intel and IShares IBonds go up and down completely randomly.

Pair Corralation between Intel and IShares IBonds

Given the investment horizon of 90 days Intel is expected to generate 92.03 times more return on investment than IShares IBonds. However, Intel is 92.03 times more volatile than iShares iBonds Dec. It trades about 0.05 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.61 per unit of risk. If you would invest  2,204  in Intel on August 30, 2024 and sell it today you would earn a total of  161.00  from holding Intel or generate 7.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Intel  vs.  iShares iBonds Dec

Intel

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in December 2024.

iShares iBonds Dec

Risk-Adjusted Performance

47 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in iShares iBonds Dec are ranked lower than 47 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, IShares IBonds is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Intel and IShares IBonds

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

The idea behind Intel and iShares iBonds Dec 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.