Correlation Between Western Investment and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both Western Investment and INTEL CDR 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 Western Investment and INTEL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Investment and INTEL CDR, you can compare the effects of market volatilities on Western Investment and INTEL CDR 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 Western Investment with a short position of INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Investment and INTEL CDR.
Diversification Opportunities for Western Investment and INTEL CDR
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and INTEL is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Western Investment and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR and Western Investment 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 Western Investment are associated (or correlated) with INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Western Investment i.e., Western Investment and INTEL CDR go up and down completely randomly.
Pair Corralation between Western Investment and INTEL CDR
Given the investment horizon of 90 days Western Investment is expected to generate 1.71 times more return on investment than INTEL CDR. However, Western Investment is 1.71 times more volatile than INTEL CDR. It trades about 0.07 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.02 per unit of risk. If you would invest 42.00 in Western Investment on September 17, 2024 and sell it today you would earn a total of 7.00 from holding Western Investment or generate 16.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Western Investment vs. INTEL CDR
Performance |
Timeline |
Western Investment |
INTEL CDR |
Western Investment and INTEL CDR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Investment and INTEL CDR
The main advantage of trading using opposite Western Investment and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Investment position performs unexpectedly, INTEL CDR 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 CDR will offset losses from the drop in INTEL CDR's long position.Western Investment vs. NeXGold Mining Corp | Western Investment vs. Pembina Pipeline Corp | Western Investment vs. Sparx Technology | Western Investment vs. A W FOOD |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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