Correlation Between Intel and Fidelity New

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

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

Diversification Opportunities for Intel and Fidelity New

0.63

Correlation Coefficient

Intel  Fidelity New

Poor diversification

The 3 months correlation between Intel and Fidelity is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Fidelity New Millennium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Millennium 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 Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Millennium has no effect on the direction of Intel i.e., Intel and Fidelity New go up and down completely randomly.

Pair Corralation between Intel and Fidelity New

Given the investment horizon of 90 days Intel is expected to under-perform the Fidelity New. In addition to that, Intel is 3.73 times more volatile than Fidelity New Millennium. It trades about -0.06 of its total potential returns per unit of risk. Fidelity New Millennium is currently generating about -0.18 per unit of volatility. If you would invest  4,359  in Fidelity New Millennium on September 15, 2024 and sell it today you would lose (275.00) from holding Fidelity New Millennium or give up 6.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	27.78%
Values	Daily Returns

Intel  vs.  Fidelity New Millennium

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 rather sound basic indicators, Intel is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Fidelity New Millennium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity New Millennium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Fidelity New is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Intel and Fidelity New

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

The idea behind Intel and Fidelity New Millennium 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.