Correlation Between Canaf Investments and INTEL CDR

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

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

Diversification Opportunities for Canaf Investments and INTEL CDR

0.37

Correlation Coefficient

Canaf Investments  INTEL CDR

Weak diversification

The 3 months correlation between Canaf and INTEL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR and Canaf Investments 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 Canaf Investments 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 Canaf Investments i.e., Canaf Investments and INTEL CDR go up and down completely randomly.

Pair Corralation between Canaf Investments and INTEL CDR

Assuming the 90 days horizon Canaf Investments is expected to generate 1.26 times more return on investment than INTEL CDR. However, Canaf Investments is 1.26 times more volatile than INTEL CDR. It trades about 0.0 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.1 per unit of risk. If you would invest  32.00  in Canaf Investments on October 6, 2024 and sell it today you would lose (1.00) from holding Canaf Investments or give up 3.12% of portfolio value over 90 days.

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

Canaf Investments  vs.  INTEL CDR

Canaf Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canaf Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Canaf Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

INTEL CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTEL CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Canaf Investments and INTEL CDR

The main advantage of trading using opposite Canaf Investments and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments 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.

The idea behind Canaf Investments and INTEL CDR 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.