Correlation Between Intel and Comcast

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

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

Diversification Opportunities for Intel and Comcast

0.81

Correlation Coefficient

Intel  Comcast

Very poor diversification

The 3 months correlation between Intel and Comcast is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Comcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast 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 Comcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast has no effect on the direction of Intel i.e., Intel and Comcast go up and down completely randomly.

Pair Corralation between Intel and Comcast

Assuming the 90 days trading horizon Intel is expected to generate 0.94 times more return on investment than Comcast. However, Intel is 1.06 times less risky than Comcast. It trades about 0.0 of its potential returns per unit of risk. Comcast is currently generating about -0.19 per unit of risk. If you would invest  1,980  in Intel on October 7, 2024 and sell it today you would lose (7.00) from holding Intel or give up 0.35% of portfolio value over 90 days.

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

Intel  vs.  Comcast

Intel

Risk-Adjusted Performance

0 of 100

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

Comcast

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Intel and Comcast

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

The idea behind Intel and Comcast 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.