Correlation Between Intel and C21 Investments

Can any of the company-specific risk be diversified away by investing in both Intel and C21 Investments 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 C21 Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and C21 Investments, you can compare the effects of market volatilities on Intel and C21 Investments 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 C21 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and C21 Investments.

Diversification Opportunities for Intel and C21 Investments

-0.53

Correlation Coefficient

Intel  C21 Investments

Excellent diversification

The 3 months correlation between Intel and C21 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Intel and C21 Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C21 Investments 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 C21 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C21 Investments has no effect on the direction of Intel i.e., Intel and C21 Investments go up and down completely randomly.

Pair Corralation between Intel and C21 Investments

Given the investment horizon of 90 days Intel is expected to generate 2.28 times less return on investment than C21 Investments. But when comparing it to its historical volatility, Intel is 2.83 times less risky than C21 Investments. It trades about 0.04 of its potential returns per unit of risk. C21 Investments is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22.00  in C21 Investments on September 12, 2024 and sell it today you would lose (1.00) from holding C21 Investments or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Intel  vs.  C21 Investments

Intel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

C21 Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C21 Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, C21 Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and C21 Investments

The main advantage of trading using opposite Intel and C21 Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, C21 Investments 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 C21 Investments will offset losses from the drop in C21 Investments' long position.

The idea behind Intel and C21 Investments 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.