Correlation Between INTEL CDR and A W

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

By analyzing existing cross correlation between INTEL CDR and A W FOOD, you can compare the effects of market volatilities on INTEL CDR and A W 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 A W. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTEL CDR and A W.

Diversification Opportunities for INTEL CDR and A W

-0.08

Correlation Coefficient

INTEL CDR  A W

Good diversification

The 3 months correlation between INTEL and A W is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and A W FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A W FOOD 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 A W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A W FOOD has no effect on the direction of INTEL CDR i.e., INTEL CDR and A W go up and down completely randomly.

Pair Corralation between INTEL CDR and A W

Assuming the 90 days trading horizon INTEL CDR is expected to generate 1.67 times more return on investment than A W. However, INTEL CDR is 1.67 times more volatile than A W FOOD. It trades about 0.01 of its potential returns per unit of risk. A W FOOD is currently generating about -0.1 per unit of risk. If you would invest  1,234  in INTEL CDR on September 14, 2024 and sell it today you would lose (11.00) from holding INTEL CDR or give up 0.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.49%
Values	Daily Returns

INTEL CDR  vs.  A W FOOD

INTEL CDR

Risk-Adjusted Performance

0 of 100

Very Weak

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

A W FOOD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A W FOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with INTEL CDR and A W

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

The idea behind INTEL CDR and A W FOOD 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.