Correlation Between Antofagasta Plc and Intel

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

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

Diversification Opportunities for Antofagasta Plc and Intel

-0.39

Correlation Coefficient

Antofagasta Plc  Intel

Very good diversification

The 3 months correlation between Antofagasta and Intel is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta plc and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Antofagasta Plc 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 Antofagasta plc 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 Antofagasta Plc i.e., Antofagasta Plc and Intel go up and down completely randomly.

Pair Corralation between Antofagasta Plc and Intel

Assuming the 90 days horizon Antofagasta plc is expected to generate 0.61 times more return on investment than Intel. However, Antofagasta plc is 1.65 times less risky than Intel. It trades about -0.06 of its potential returns per unit of risk. Intel is currently generating about -0.05 per unit of risk. If you would invest  2,514  in Antofagasta plc on September 19, 2024 and sell it today you would lose (497.00) from holding Antofagasta plc or give up 19.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.22%
Values	Daily Returns

Antofagasta plc  vs.  Intel

Antofagasta plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antofagasta plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Antofagasta Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Intel

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with Antofagasta Plc and Intel

The main advantage of trading using opposite Antofagasta Plc and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta Plc 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 Antofagasta plc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.