Correlation Between Intel and Invesco Exchange

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

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

Diversification Opportunities for Intel and Invesco Exchange

0.73

Correlation Coefficient

Intel  Invesco Exchange

Poor diversification

The 3 months correlation between Intel and Invesco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Invesco Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Exchange Traded 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 Invesco Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Exchange Traded has no effect on the direction of Intel i.e., Intel and Invesco Exchange go up and down completely randomly.

Pair Corralation between Intel and Invesco Exchange

Given the investment horizon of 90 days Intel is expected to generate 5.81 times more return on investment than Invesco Exchange. However, Intel is 5.81 times more volatile than Invesco Exchange Traded. It trades about 0.0 of its potential returns per unit of risk. Invesco Exchange Traded is currently generating about -0.07 per unit of risk. If you would invest  2,405  in Intel on November 28, 2024 and sell it today you would lose (106.00) from holding Intel or give up 4.41% of portfolio value over 90 days.

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

Intel  vs.  Invesco Exchange Traded

Intel

Risk-Adjusted Performance

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 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.

Invesco Exchange Traded

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Invesco Exchange is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Intel and Invesco Exchange

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

The idea behind Intel and Invesco Exchange Traded 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.