Correlation Between INTEL CDR and True North

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

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

Diversification Opportunities for INTEL CDR and True North

-0.32

Correlation Coefficient

INTEL CDR  True North

Very good diversification

The 3 months correlation between INTEL and True is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding INTEL CDR and True North Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True North Commercial 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 True North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True North Commercial has no effect on the direction of INTEL CDR i.e., INTEL CDR and True North go up and down completely randomly.

Pair Corralation between INTEL CDR and True North

Assuming the 90 days trading horizon INTEL CDR is expected to generate 1.03 times more return on investment than True North. However, INTEL CDR is 1.03 times more volatile than True North Commercial. It trades about 0.08 of its potential returns per unit of risk. True North Commercial is currently generating about 0.04 per unit of risk. If you would invest  1,186  in INTEL CDR on December 22, 2024 and sell it today you would earn a total of  223.00  from holding INTEL CDR or generate 18.8% return on investment over 90 days.

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

INTEL CDR  vs.  True North Commercial

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 unfluctuating technical and fundamental indicators, INTEL CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

True North Commercial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in True North Commercial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, True North may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with INTEL CDR and True North

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

The idea behind INTEL CDR and True North Commercial 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.