Correlation Between Intel and NORDIC HALIBUT

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

By analyzing existing cross correlation between Intel and NORDIC HALIBUT AS, you can compare the effects of market volatilities on Intel and NORDIC HALIBUT 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 NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and NORDIC HALIBUT.

Diversification Opportunities for Intel and NORDIC HALIBUT

0.3

Correlation Coefficient

Intel  NORDIC HALIBUT

Weak diversification

The 3 months correlation between Intel and NORDIC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Intel and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS 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 NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Intel i.e., Intel and NORDIC HALIBUT go up and down completely randomly.

Pair Corralation between Intel and NORDIC HALIBUT

Assuming the 90 days trading horizon Intel is expected to generate 4.0 times more return on investment than NORDIC HALIBUT. However, Intel is 4.0 times more volatile than NORDIC HALIBUT AS. It trades about 0.15 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about 0.06 per unit of risk. If you would invest  1,979  in Intel on December 2, 2024 and sell it today you would earn a total of  243.00  from holding Intel or generate 12.28% return on investment over 90 days.

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

Intel  vs.  NORDIC HALIBUT AS

Intel

Risk-Adjusted Performance

Very Weak

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

NORDIC HALIBUT AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NORDIC HALIBUT AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Intel and NORDIC HALIBUT

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

The idea behind Intel and NORDIC HALIBUT AS 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.