Correlation Between Bitcoin and Intel

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

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

Diversification Opportunities for Bitcoin and Intel

0.1

Correlation Coefficient

Bitcoin  Intel

Average diversification

The 3 months correlation between Bitcoin and Intel is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Bitcoin 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 Bitcoin 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 Bitcoin i.e., Bitcoin and Intel go up and down completely randomly.

Pair Corralation between Bitcoin and Intel

Assuming the 90 days trading horizon Bitcoin is expected to generate 1.02 times less return on investment than Intel. But when comparing it to its historical volatility, Bitcoin is 1.73 times less risky than Intel. It trades about 0.26 of its potential returns per unit of risk. Intel is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,980  in Intel on October 27, 2024 and sell it today you would earn a total of  166.00  from holding Intel or generate 8.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Bitcoin  vs.  Intel

Bitcoin

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

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. Despite fairly strong forward indicators, Intel is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bitcoin and Intel

The main advantage of trading using opposite Bitcoin and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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 Bitcoin 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.