Correlation Between INTEL CDR and Dream Impact

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

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

Diversification Opportunities for INTEL CDR and Dream Impact

0.64

Correlation Coefficient

INTEL CDR  Dream Impact

Poor diversification

The 3 months correlation between INTEL and Dream is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and Dream Impact Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Impact Trust 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 Dream Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Impact Trust has no effect on the direction of INTEL CDR i.e., INTEL CDR and Dream Impact go up and down completely randomly.

Pair Corralation between INTEL CDR and Dream Impact

Assuming the 90 days trading horizon INTEL CDR is expected to generate 1.02 times more return on investment than Dream Impact. However, INTEL CDR is 1.02 times more volatile than Dream Impact Trust. It trades about -0.07 of its potential returns per unit of risk. Dream Impact Trust is currently generating about -0.22 per unit of risk. If you would invest  1,220  in INTEL CDR on October 10, 2024 and sell it today you would lose (45.00) from holding INTEL CDR or give up 3.69% of portfolio value over 90 days.

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

INTEL CDR  vs.  Dream Impact Trust

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 weak 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.

Dream Impact Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dream Impact Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Dream Impact

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

The idea behind INTEL CDR and Dream Impact Trust 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.