Correlation Between METISA Metalrgica and Intel

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

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

Diversification Opportunities for METISA Metalrgica and Intel

-0.84

Correlation Coefficient

METISA Metalrgica  Intel

Pay attention - limited upside

The 3 months correlation between METISA and Intel is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and METISA Metalrgica 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 METISA Metalrgica Timboense 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 METISA Metalrgica i.e., METISA Metalrgica and Intel go up and down completely randomly.

Pair Corralation between METISA Metalrgica and Intel

Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to under-perform the Intel. But the preferred stock apears to be less risky and, when comparing its historical volatility, METISA Metalrgica Timboense is 1.41 times less risky than Intel. The preferred stock trades about -0.1 of its potential returns per unit of risk. The Intel is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,020  in Intel on September 2, 2024 and sell it today you would earn a total of  390.00  from holding Intel or generate 19.31% return on investment over 90 days.

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

METISA Metalrgica Timboense  vs.  Intel

METISA Metalrgica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days METISA Metalrgica Timboense has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Intel

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Intel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with METISA Metalrgica and Intel

The main advantage of trading using opposite METISA Metalrgica and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica 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 METISA Metalrgica Timboense 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.