Correlation Between Stora Enso and Intel

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

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

Diversification Opportunities for Stora Enso and Intel

0.53

Correlation Coefficient

Stora Enso  Intel

Very weak diversification

The 3 months correlation between Stora and Intel is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Stora Enso 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 Stora Enso Oyj 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 Stora Enso i.e., Stora Enso and Intel go up and down completely randomly.

Pair Corralation between Stora Enso and Intel

Assuming the 90 days trading horizon Stora Enso Oyj is expected to generate 0.58 times more return on investment than Intel. However, Stora Enso Oyj is 1.71 times less risky than Intel. It trades about 0.09 of its potential returns per unit of risk. Intel is currently generating about 0.0 per unit of risk. If you would invest  932.00  in Stora Enso Oyj on December 4, 2024 and sell it today you would earn a total of  96.00  from holding Stora Enso Oyj or generate 10.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Stora Enso Oyj  vs.  Intel

Stora Enso Oyj

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stora Enso Oyj are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Stora Enso may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Intel

Risk-Adjusted Performance

Insignificant

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Intel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stora Enso and Intel

The main advantage of trading using opposite Stora Enso and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso 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 Stora Enso Oyj 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.