Correlation Between Intel and College Retirement
Can any of the company-specific risk be diversified away by investing in both Intel and College Retirement 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 College Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and College Retirement Equities, you can compare the effects of market volatilities on Intel and College Retirement 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 College Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and College Retirement.
Diversification Opportunities for Intel and College Retirement
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intel and College is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Intel and College Retirement Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on College Retirement 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 College Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of College Retirement has no effect on the direction of Intel i.e., Intel and College Retirement go up and down completely randomly.
Pair Corralation between Intel and College Retirement
Given the investment horizon of 90 days Intel is expected to generate 2.84 times more return on investment than College Retirement. However, Intel is 2.84 times more volatile than College Retirement Equities. It trades about 0.1 of its potential returns per unit of risk. College Retirement Equities is currently generating about 0.27 per unit of risk. If you would invest 1,889 in Intel on September 6, 2024 and sell it today you would earn a total of 307.00 from holding Intel or generate 16.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Intel vs. College Retirement Equities
Performance |
Timeline |
Intel |
College Retirement |
Intel and College Retirement Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Intel and College Retirement
The main advantage of trading using opposite Intel and College Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, College Retirement 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 College Retirement will offset losses from the drop in College Retirement's long position.Intel vs. NXP Semiconductors NV | Intel vs. Monolithic Power Systems | Intel vs. ON Semiconductor | Intel vs. GSI Technology |
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Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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