Correlation Between Intel and MaxLinear

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

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

Diversification Opportunities for Intel and MaxLinear

-0.64

Correlation Coefficient

Intel  MaxLinear

Excellent diversification

The 3 months correlation between Intel and MaxLinear is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Intel and MaxLinear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MaxLinear and Intel 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 Intel are associated (or correlated) with MaxLinear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MaxLinear has no effect on the direction of Intel i.e., Intel and MaxLinear go up and down completely randomly.

Pair Corralation between Intel and MaxLinear

Assuming the 90 days horizon Intel is expected to generate 2.12 times less return on investment than MaxLinear. But when comparing it to its historical volatility, Intel is 1.15 times less risky than MaxLinear. It trades about 0.2 of its potential returns per unit of risk. MaxLinear is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  1,890  in MaxLinear on October 23, 2024 and sell it today you would earn a total of  413.00  from holding MaxLinear or generate 21.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Intel  vs.  MaxLinear

Intel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MaxLinear

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MaxLinear reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and MaxLinear

The main advantage of trading using opposite Intel and MaxLinear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, MaxLinear 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 MaxLinear will offset losses from the drop in MaxLinear's long position.

The idea behind Intel and MaxLinear 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.