Correlation Between Freshpet and Intel

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

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

Diversification Opportunities for Freshpet and Intel

0.44

Correlation Coefficient

Freshpet  Intel

Very weak diversification

The 3 months correlation between Freshpet and Intel is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Freshpet and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Freshpet 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 Freshpet 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 Freshpet i.e., Freshpet and Intel go up and down completely randomly.

Pair Corralation between Freshpet and Intel

Assuming the 90 days horizon Freshpet is expected to generate 0.34 times more return on investment than Intel. However, Freshpet is 2.95 times less risky than Intel. It trades about -0.4 of its potential returns per unit of risk. Intel is currently generating about -0.33 per unit of risk. If you would invest  14,870  in Freshpet on September 23, 2024 and sell it today you would lose (1,370) from holding Freshpet or give up 9.21% of portfolio value over 90 days.

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

Freshpet  vs.  Intel

Freshpet

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Freshpet are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Freshpet is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the 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 Freshpet and Intel

The main advantage of trading using opposite Freshpet and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freshpet 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 Freshpet 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..