Correlation Between Intel and Cogna Educacao

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

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

Diversification Opportunities for Intel and Cogna Educacao

0.47

Correlation Coefficient

Intel  Cogna Educacao

Very weak diversification

The 3 months correlation between Intel and Cogna is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Cogna Educacao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogna Educacao SA 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 Cogna Educacao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogna Educacao SA has no effect on the direction of Intel i.e., Intel and Cogna Educacao go up and down completely randomly.

Pair Corralation between Intel and Cogna Educacao

Given the investment horizon of 90 days Intel is expected to generate 19.97 times less return on investment than Cogna Educacao. But when comparing it to its historical volatility, Intel is 2.48 times less risky than Cogna Educacao. It trades about 0.01 of its potential returns per unit of risk. Cogna Educacao SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Cogna Educacao SA on December 1, 2024 and sell it today you would earn a total of  11.00  from holding Cogna Educacao SA or generate 50.0% return on investment over 90 days.

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

Intel  vs.  Cogna Educacao SA

Intel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cogna Educacao SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cogna Educacao SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Cogna Educacao showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Cogna Educacao

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

The idea behind Intel and Cogna Educacao SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..