Correlation Between Grupo Sports and Intel

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

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

Diversification Opportunities for Grupo Sports and Intel

0.79

Correlation Coefficient

Grupo Sports  Intel

Poor diversification

The 3 months correlation between Grupo and Intel is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Grupo Sports 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 Grupo Sports World 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 Grupo Sports i.e., Grupo Sports and Intel go up and down completely randomly.

Pair Corralation between Grupo Sports and Intel

Assuming the 90 days trading horizon Grupo Sports World is expected to generate 0.62 times more return on investment than Intel. However, Grupo Sports World is 1.61 times less risky than Intel. It trades about 0.17 of its potential returns per unit of risk. Intel is currently generating about 0.06 per unit of risk. If you would invest  525.00  in Grupo Sports World on August 31, 2024 and sell it today you would earn a total of  114.00  from holding Grupo Sports World or generate 21.71% return on investment over 90 days.

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

Grupo Sports World  vs.  Intel

Grupo Sports World

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Sports World are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

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 fairly weak basic indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Grupo Sports and Intel

The main advantage of trading using opposite Grupo Sports and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports 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 Grupo Sports World 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.