Correlation Between INTEL CDR and Apple

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

By analyzing existing cross correlation between INTEL CDR and Apple Inc CDR, you can compare the effects of market volatilities on INTEL CDR and Apple 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 CDR with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTEL CDR and Apple.

Diversification Opportunities for INTEL CDR and Apple

-0.7

Correlation Coefficient

INTEL CDR  Apple

Excellent diversification

The 3 months correlation between INTEL and Apple is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and INTEL CDR 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 CDR are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of INTEL CDR i.e., INTEL CDR and Apple go up and down completely randomly.

Pair Corralation between INTEL CDR and Apple

Assuming the 90 days trading horizon INTEL CDR is expected to generate 2.54 times more return on investment than Apple. However, INTEL CDR is 2.54 times more volatile than Apple Inc CDR. It trades about 0.02 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.01 per unit of risk. If you would invest  1,296  in INTEL CDR on October 23, 2024 and sell it today you would earn a total of  1.00  from holding INTEL CDR or generate 0.08% return on investment over 90 days.

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

INTEL CDR  vs.  Apple Inc CDR

INTEL CDR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INTEL CDR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, INTEL CDR is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Apple Inc CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Apple is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with INTEL CDR and Apple

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

The idea behind INTEL CDR and Apple Inc CDR 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.