Correlation Between Intel and Wahed FTSE

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

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

Diversification Opportunities for Intel and Wahed FTSE

-0.21

Correlation Coefficient

Intel  Wahed FTSE

Very good diversification

The 3 months correlation between Intel and Wahed is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Wahed FTSE USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahed FTSE USA 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 Wahed FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahed FTSE USA has no effect on the direction of Intel i.e., Intel and Wahed FTSE go up and down completely randomly.

Pair Corralation between Intel and Wahed FTSE

Given the investment horizon of 90 days Intel is expected to generate 4.37 times more return on investment than Wahed FTSE. However, Intel is 4.37 times more volatile than Wahed FTSE USA. It trades about 0.09 of its potential returns per unit of risk. Wahed FTSE USA is currently generating about -0.09 per unit of risk. If you would invest  1,982  in Intel on December 28, 2024 and sell it today you would earn a total of  380.00  from holding Intel or generate 19.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Intel  vs.  Wahed FTSE USA

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Wahed FTSE USA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Intel and Wahed FTSE

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

The idea behind Intel and Wahed FTSE USA 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.