Correlation Between Intel and Gold Springs

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

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

Diversification Opportunities for Intel and Gold Springs

-0.32

Correlation Coefficient

Intel  Gold Springs

Very good diversification

The 3 months correlation between Intel and Gold is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Gold Springs Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Springs Resource 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 Gold Springs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Springs Resource has no effect on the direction of Intel i.e., Intel and Gold Springs go up and down completely randomly.

Pair Corralation between Intel and Gold Springs

Given the investment horizon of 90 days Intel is expected to under-perform the Gold Springs. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 2.67 times less risky than Gold Springs. The stock trades about -0.01 of its potential returns per unit of risk. The Gold Springs Resource is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8.80  in Gold Springs Resource on August 31, 2024 and sell it today you would lose (2.00) from holding Gold Springs Resource or give up 22.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.73%
Values	Daily Returns

Intel  vs.  Gold Springs Resource

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.

Gold Springs Resource

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Springs Resource are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Springs may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Intel and Gold Springs

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

The idea behind Intel and Gold Springs Resource 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.