Correlation Between Intel and Everspin Technologies

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

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

Diversification Opportunities for Intel and Everspin Technologies

-0.3

Correlation Coefficient

Intel  Everspin Technologies

Very good diversification

The 3 months correlation between Intel and Everspin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies 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 Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Intel i.e., Intel and Everspin Technologies go up and down completely randomly.

Pair Corralation between Intel and Everspin Technologies

Given the investment horizon of 90 days Intel is expected to generate 1.56 times more return on investment than Everspin Technologies. However, Intel is 1.56 times more volatile than Everspin Technologies. It trades about 0.0 of its potential returns per unit of risk. Everspin Technologies is currently generating about -0.06 per unit of risk. If you would invest  2,405  in Intel on November 28, 2024 and sell it today you would lose (106.00) from holding Intel or give up 4.41% of portfolio value over 90 days.

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

Intel  vs.  Everspin Technologies

Intel

Risk-Adjusted Performance

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Everspin Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everspin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Intel and Everspin Technologies

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

The idea behind Intel and Everspin Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.