Correlation Between Intel and Nexa Resources

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

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

Diversification Opportunities for Intel and Nexa Resources

0.61

Correlation Coefficient

Intel  Nexa Resources

Poor diversification

The 3 months correlation between Intel and Nexa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Nexa Resources Peru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources Peru 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 Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources Peru has no effect on the direction of Intel i.e., Intel and Nexa Resources go up and down completely randomly.

Pair Corralation between Intel and Nexa Resources

Assuming the 90 days trading horizon Intel is expected to generate 2.0 times more return on investment than Nexa Resources. However, Intel is 2.0 times more volatile than Nexa Resources Peru. It trades about -0.01 of its potential returns per unit of risk. Nexa Resources Peru is currently generating about -0.03 per unit of risk. If you would invest  2,770  in Intel on October 11, 2024 and sell it today you would lose (780.00) from holding Intel or give up 28.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	74.57%
Values	Daily Returns

Intel  vs.  Nexa Resources Peru

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. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Nexa Resources Peru

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexa Resources Peru has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Intel and Nexa Resources

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

The idea behind Intel and Nexa Resources Peru 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.