Correlation Between Intel and Johcm International

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

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

Diversification Opportunities for Intel and Johcm International

-0.33

Correlation Coefficient

Intel  Johcm International

Very good diversification

The 3 months correlation between Intel and Johcm is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Johcm International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm International 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 Johcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm International has no effect on the direction of Intel i.e., Intel and Johcm International go up and down completely randomly.

Pair Corralation between Intel and Johcm International

Given the investment horizon of 90 days Intel is expected to generate 4.31 times more return on investment than Johcm International. However, Intel is 4.31 times more volatile than Johcm International Select. It trades about 0.17 of its potential returns per unit of risk. Johcm International Select is currently generating about -0.07 per unit of risk. If you would invest  2,152  in Intel on September 1, 2024 and sell it today you would earn a total of  253.00  from holding Intel or generate 11.76% return on investment over 90 days.

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

Intel  vs.  Johcm International Select

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.

Johcm International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Johcm International Select has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Johcm International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and Johcm International

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

The idea behind Intel and Johcm International Select 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.