Correlation Between Intel and Msvif Emerging

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

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

Diversification Opportunities for Intel and Msvif Emerging

0.46

Correlation Coefficient

Intel  Msvif Emerging

Very weak diversification

The 3 months correlation between Intel and Msvif is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Msvif Emerging Mkts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msvif Emerging Mkts 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 Msvif Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msvif Emerging Mkts has no effect on the direction of Intel i.e., Intel and Msvif Emerging go up and down completely randomly.

Pair Corralation between Intel and Msvif Emerging

Given the investment horizon of 90 days Intel is expected to generate 16.6 times more return on investment than Msvif Emerging. However, Intel is 16.6 times more volatile than Msvif Emerging Mkts. It trades about 0.1 of its potential returns per unit of risk. Msvif Emerging Mkts is currently generating about 0.27 per unit of risk. If you would invest  1,952  in Intel on December 20, 2024 and sell it today you would earn a total of  460.00  from holding Intel or generate 23.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Intel  vs.  Msvif Emerging Mkts

Intel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Msvif Emerging Mkts

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Msvif Emerging Mkts are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Msvif Emerging 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 Msvif Emerging

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

The idea behind Intel and Msvif Emerging Mkts 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.