Correlation Between Intel and Ambarella

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

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

Diversification Opportunities for Intel and Ambarella

-0.13

Correlation Coefficient

Intel  Ambarella

Good diversification

The 3 months correlation between Intel and Ambarella is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Ambarella in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambarella and Intel 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 are associated (or correlated) with Ambarella. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambarella has no effect on the direction of Intel i.e., Intel and Ambarella go up and down completely randomly.

Pair Corralation between Intel and Ambarella

Given the investment horizon of 90 days Intel is expected to generate 1.13 times more return on investment than Ambarella. However, Intel is 1.13 times more volatile than Ambarella. It trades about 0.07 of its potential returns per unit of risk. Ambarella is currently generating about -0.13 per unit of risk. If you would invest  1,982  in Intel on December 30, 2024 and sell it today you would earn a total of  289.00  from holding Intel or generate 14.58% return on investment over 90 days.

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

Intel  vs.  Ambarella

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ambarella

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ambarella has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Intel and Ambarella

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

The idea behind Intel and Ambarella 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.