Correlation Between Intel and Amtech Systems

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

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

Diversification Opportunities for Intel and Amtech Systems

0.02

Correlation Coefficient

Intel  Amtech Systems

Significant diversification

The 3 months correlation between Intel and Amtech is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems 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 Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of Intel i.e., Intel and Amtech Systems go up and down completely randomly.

Pair Corralation between Intel and Amtech Systems

Given the investment horizon of 90 days Intel is expected to generate 1.24 times more return on investment than Amtech Systems. However, Intel is 1.24 times more volatile than Amtech Systems. It trades about 0.07 of its potential returns per unit of risk. Amtech Systems is currently generating about -0.03 per unit of risk. If you would invest  1,982  in Intel on December 28, 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  Amtech Systems

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.

Amtech Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amtech Systems 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Intel and Amtech Systems

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

The idea behind Intel and Amtech Systems 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.