Correlation Between Corporacion Aceros and Intel

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

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

Diversification Opportunities for Corporacion Aceros and Intel

0.6

Correlation Coefficient

Corporacion Aceros  Intel

Poor diversification

The 3 months correlation between Corporacion and Intel is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion Aceros Arequipa and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Corporacion Aceros 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 Corporacion Aceros Arequipa 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 Corporacion Aceros i.e., Corporacion Aceros and Intel go up and down completely randomly.

Pair Corralation between Corporacion Aceros and Intel

Assuming the 90 days trading horizon Corporacion Aceros Arequipa is expected to generate 0.41 times more return on investment than Intel. However, Corporacion Aceros Arequipa is 2.47 times less risky than Intel. It trades about -0.03 of its potential returns per unit of risk. Intel is currently generating about -0.01 per unit of risk. If you would invest  142.00  in Corporacion Aceros Arequipa on October 11, 2024 and sell it today you would lose (38.00) from holding Corporacion Aceros Arequipa or give up 26.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	46.25%
Values	Daily Returns

Corporacion Aceros Arequipa  vs.  Intel

Corporacion Aceros

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corporacion Aceros Arequipa are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Corporacion Aceros is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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 inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Corporacion Aceros and Intel

The main advantage of trading using opposite Corporacion Aceros and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion Aceros 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 Corporacion Aceros Arequipa 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.