Correlation Between Intel and Hemisphere Energy

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

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

Diversification Opportunities for Intel and Hemisphere Energy

0.54

Correlation Coefficient

Intel  Hemisphere Energy

Very weak diversification

The 3 months correlation between Intel and Hemisphere is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Hemisphere Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy Corp 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 Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy Corp has no effect on the direction of Intel i.e., Intel and Hemisphere Energy go up and down completely randomly.

Pair Corralation between Intel and Hemisphere Energy

Assuming the 90 days trading horizon Intel is expected to generate 2.59 times more return on investment than Hemisphere Energy. However, Intel is 2.59 times more volatile than Hemisphere Energy Corp. It trades about 0.01 of its potential returns per unit of risk. Hemisphere Energy Corp is currently generating about 0.0 per unit of risk. If you would invest  2,233  in Intel on November 28, 2024 and sell it today you would lose (43.00) from holding Intel or give up 1.93% of portfolio value over 90 days.

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

Intel  vs.  Hemisphere Energy Corp

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.

Hemisphere Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hemisphere Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hemisphere Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intel and Hemisphere Energy

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

The idea behind Intel and Hemisphere Energy Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.