Correlation Between Intel and E79 Resources

Can any of the company-specific risk be diversified away by investing in both Intel and E79 Resources 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 E79 Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and E79 Resources Corp, you can compare the effects of market volatilities on Intel and E79 Resources 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 E79 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and E79 Resources.

Diversification Opportunities for Intel and E79 Resources

-0.31

Correlation Coefficient

Intel  E79 Resources

Very good diversification

The 3 months correlation between Intel and E79 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Intel and E79 Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E79 Resources Corp 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 E79 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E79 Resources Corp has no effect on the direction of Intel i.e., Intel and E79 Resources go up and down completely randomly.

Pair Corralation between Intel and E79 Resources

Given the investment horizon of 90 days Intel is expected to generate 4.68 times less return on investment than E79 Resources. But when comparing it to its historical volatility, Intel is 6.64 times less risky than E79 Resources. It trades about 0.12 of its potential returns per unit of risk. E79 Resources Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.08  in E79 Resources Corp on September 2, 2024 and sell it today you would lose (0.05) from holding E79 Resources Corp or give up 4.63% of portfolio value over 90 days.

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

Intel  vs.  E79 Resources Corp

Intel

Risk-Adjusted Performance

9 of 100

OK

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

E79 Resources Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in E79 Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, E79 Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and E79 Resources

The main advantage of trading using opposite Intel and E79 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, E79 Resources 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 E79 Resources will offset losses from the drop in E79 Resources' long position.

The idea behind Intel and E79 Resources Corp 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.