Correlation Between Intel and MaxLinear

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Can any of the company-specific risk be diversified away by investing in both Intel and MaxLinear 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 MaxLinear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and MaxLinear, you can compare the effects of market volatilities on Intel and MaxLinear 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 MaxLinear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and MaxLinear.

Diversification Opportunities for Intel and MaxLinear

-0.54
  Correlation Coefficient

Excellent diversification

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

Pair Corralation between Intel and MaxLinear

Assuming the 90 days trading horizon Intel is expected to under-perform the MaxLinear. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 1.52 times less risky than MaxLinear. The stock trades about -0.15 of its potential returns per unit of risk. The MaxLinear is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,374  in MaxLinear on October 8, 2024 and sell it today you would earn a total of  619.00  from holding MaxLinear or generate 45.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Intel  vs.  MaxLinear

 Performance 
       Timeline  
Intel 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
MaxLinear 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MaxLinear are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MaxLinear reported solid returns over the last few months and may actually be approaching a breakup point.

Intel and MaxLinear Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel and MaxLinear

The main advantage of trading using opposite Intel and MaxLinear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, MaxLinear 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 MaxLinear will offset losses from the drop in MaxLinear's long position.
The idea behind Intel and MaxLinear 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.
Check out your portfolio center.
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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