Correlation Between Impact ISR and Intel

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

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

Diversification Opportunities for Impact ISR and Intel

-0.58

Correlation Coefficient

Impact ISR  Intel

Excellent diversification

The 3 months correlation between Impact and Intel is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Impact ISR Performance and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Impact ISR 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 Impact ISR Performance 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 Impact ISR i.e., Impact ISR and Intel go up and down completely randomly.

Pair Corralation between Impact ISR and Intel

Assuming the 90 days trading horizon Impact ISR Performance is expected to generate 0.17 times more return on investment than Intel. However, Impact ISR Performance is 5.93 times less risky than Intel. It trades about -0.02 of its potential returns per unit of risk. Intel is currently generating about -0.33 per unit of risk. If you would invest  5,336  in Impact ISR Performance on September 23, 2024 and sell it today you would lose (11.00) from holding Impact ISR Performance or give up 0.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Impact ISR Performance  vs.  Intel

Impact ISR Performance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact ISR Performance has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Impact ISR is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 Impact ISR and Intel

The main advantage of trading using opposite Impact ISR and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impact ISR 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 Impact ISR Performance 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.