Correlation Between Fevertree Drinks and Intel

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

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

Diversification Opportunities for Fevertree Drinks and Intel

-0.4

Correlation Coefficient

Fevertree Drinks  Intel

Very good diversification

The 3 months correlation between Fevertree and Intel is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks PLC and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks i.e., Fevertree Drinks and Intel go up and down completely randomly.

Pair Corralation between Fevertree Drinks and Intel

Assuming the 90 days trading horizon Fevertree Drinks PLC is expected to generate 0.6 times more return on investment than Intel. However, Fevertree Drinks PLC is 1.65 times less risky than Intel. It trades about 0.01 of its potential returns per unit of risk. Intel is currently generating about -0.21 per unit of risk. If you would invest  820.00  in Fevertree Drinks PLC on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Fevertree Drinks PLC or generate 0.0% return on investment over 90 days.

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

Fevertree Drinks PLC  vs.  Intel

Fevertree Drinks PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fevertree Drinks PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 stable essential indicators, Intel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fevertree Drinks and Intel

The main advantage of trading using opposite Fevertree Drinks and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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 Fevertree Drinks 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.