Correlation Between Intel and Capital Group

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

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

Diversification Opportunities for Intel and Capital Group

0.64

Correlation Coefficient

Intel  Capital Group

Poor diversification

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

Pair Corralation between Intel and Capital Group

Given the investment horizon of 90 days Intel is expected to under-perform the Capital Group. In addition to that, Intel is 4.22 times more volatile than Capital Group Conservative. It trades about -0.08 of its total potential returns per unit of risk. Capital Group Conservative is currently generating about -0.04 per unit of volatility. If you would invest  2,717  in Capital Group Conservative on October 8, 2024 and sell it today you would lose (46.00) from holding Capital Group Conservative or give up 1.69% of portfolio value over 90 days.

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

Intel  vs.  Capital Group Conservative

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel 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 basic 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.

Capital Group Conser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Group Conservative has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Capital Group is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Intel and Capital Group

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

The idea behind Intel and Capital Group Conservative 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 Stocks Directory module to find actively traded stocks across global markets.