Correlation Between INTEL CDR and Melcor Real

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

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

Diversification Opportunities for INTEL CDR and Melcor Real

0.58

Correlation Coefficient

INTEL CDR  Melcor Real

Very weak diversification

The 3 months correlation between INTEL and Melcor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and Melcor Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melcor Real Estate 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 Melcor Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melcor Real Estate has no effect on the direction of INTEL CDR i.e., INTEL CDR and Melcor Real go up and down completely randomly.

Pair Corralation between INTEL CDR and Melcor Real

Assuming the 90 days trading horizon INTEL CDR is expected to generate 7.71 times more return on investment than Melcor Real. However, INTEL CDR is 7.71 times more volatile than Melcor Real Estate. It trades about 0.08 of its potential returns per unit of risk. Melcor Real Estate is currently generating about 0.11 per unit of risk. If you would invest  1,190  in INTEL CDR on December 24, 2024 and sell it today you would earn a total of  219.00  from holding INTEL CDR or generate 18.4% return on investment over 90 days.

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

INTEL CDR  vs.  Melcor Real Estate

INTEL CDR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INTEL CDR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, INTEL CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Melcor Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Melcor Real Estate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Melcor Real is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with INTEL CDR and Melcor Real

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

The idea behind INTEL CDR and Melcor Real Estate 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.