Correlation Between TRAVIS PERKINS and Intel

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

By analyzing existing cross correlation between TRAVIS PERKINS LS 1 and Intel, you can compare the effects of market volatilities on TRAVIS PERKINS and Intel 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 TRAVIS PERKINS with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVIS PERKINS and Intel.

Diversification Opportunities for TRAVIS PERKINS and Intel

-0.05

Correlation Coefficient

TRAVIS PERKINS  Intel

Good diversification

The 3 months correlation between TRAVIS and Intel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding TRAVIS PERKINS LS 1 and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and TRAVIS PERKINS 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 TRAVIS PERKINS LS 1 are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of TRAVIS PERKINS i.e., TRAVIS PERKINS and Intel go up and down completely randomly.

Pair Corralation between TRAVIS PERKINS and Intel

Assuming the 90 days trading horizon TRAVIS PERKINS LS 1 is expected to generate 0.61 times more return on investment than Intel. However, TRAVIS PERKINS LS 1 is 1.63 times less risky than Intel. It trades about 0.0 of its potential returns per unit of risk. Intel is currently generating about 0.0 per unit of risk. If you would invest  940.00  in TRAVIS PERKINS LS 1 on September 22, 2024 and sell it today you would lose (105.00) from holding TRAVIS PERKINS LS 1 or give up 11.17% of portfolio value over 90 days.

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

TRAVIS PERKINS LS 1  vs.  Intel

TRAVIS PERKINS LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRAVIS PERKINS LS 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with TRAVIS PERKINS and Intel

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

The idea behind TRAVIS PERKINS LS 1 and Intel 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.