Correlation Between Intel and TESCO PLC

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

By analyzing existing cross correlation between Intel and TESCO PLC LS 0633333, you can compare the effects of market volatilities on Intel and TESCO PLC 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 TESCO PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and TESCO PLC.

Diversification Opportunities for Intel and TESCO PLC

-0.55

Correlation Coefficient

Intel  TESCO PLC

Excellent diversification

The 3 months correlation between Intel and TESCO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Intel and TESCO PLC LS 0633333 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TESCO PLC LS 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 TESCO PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TESCO PLC LS has no effect on the direction of Intel i.e., Intel and TESCO PLC go up and down completely randomly.

Pair Corralation between Intel and TESCO PLC

Assuming the 90 days trading horizon Intel is expected to generate 2.38 times more return on investment than TESCO PLC. However, Intel is 2.38 times more volatile than TESCO PLC LS 0633333. It trades about 0.08 of its potential returns per unit of risk. TESCO PLC LS 0633333 is currently generating about 0.03 per unit of risk. If you would invest  1,977  in Intel on September 2, 2024 and sell it today you would earn a total of  275.00  from holding Intel or generate 13.91% return on investment over 90 days.

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

Intel  vs.  TESCO PLC LS 0633333

Intel

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

TESCO PLC LS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TESCO PLC LS 0633333 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, TESCO PLC 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 TESCO PLC

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

The idea behind Intel and TESCO PLC LS 0633333 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.