Correlation Between Intel and Templeton Global

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

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

Diversification Opportunities for Intel and Templeton Global

0.13

Correlation Coefficient

Intel  Templeton Global

Average diversification

The 3 months correlation between Intel and Templeton is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Templeton Global AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global has no effect on the direction of Intel i.e., Intel and Templeton Global go up and down completely randomly.

Pair Corralation between Intel and Templeton Global

Assuming the 90 days trading horizon Intel is expected to under-perform the Templeton Global. In addition to that, Intel is 3.62 times more volatile than Templeton Global AD. It trades about -0.33 of its total potential returns per unit of risk. Templeton Global AD is currently generating about -0.35 per unit of volatility. If you would invest  3,074  in Templeton Global AD on September 23, 2024 and sell it today you would lose (206.00) from holding Templeton Global AD or give up 6.7% of portfolio value over 90 days.

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

Intel  vs.  Templeton Global AD

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 latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Templeton Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Templeton Global AD has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Intel and Templeton Global

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

The idea behind Intel and Templeton Global AD 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.