Correlation Between Intel and Next Meats

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

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

Diversification Opportunities for Intel and Next Meats

0.73

Correlation Coefficient

Intel  Next Meats

Poor diversification

The 3 months correlation between Intel and Next is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Next Meats Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Meats Holdings 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 Next Meats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Meats Holdings has no effect on the direction of Intel i.e., Intel and Next Meats go up and down completely randomly.

Pair Corralation between Intel and Next Meats

Given the investment horizon of 90 days Intel is expected to generate 0.13 times more return on investment than Next Meats. However, Intel is 7.69 times less risky than Next Meats. It trades about -0.34 of its potential returns per unit of risk. Next Meats Holdings is currently generating about -0.13 per unit of risk. If you would invest  2,435  in Intel on September 16, 2024 and sell it today you would lose (401.00) from holding Intel or give up 16.47% of portfolio value over 90 days.

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

Intel  vs.  Next Meats Holdings

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 rather sound basic indicators, Intel is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Next Meats Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Next Meats Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, Next Meats demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Next Meats

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

The idea behind Intel and Next Meats Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.