Correlation Between Intel and Carbon Streaming

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

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

Diversification Opportunities for Intel and Carbon Streaming

-0.31

Correlation Coefficient

Intel  Carbon Streaming

Very good diversification

The 3 months correlation between Intel and Carbon is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Carbon Streaming Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbon Streaming Corp 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 Carbon Streaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbon Streaming Corp has no effect on the direction of Intel i.e., Intel and Carbon Streaming go up and down completely randomly.

Pair Corralation between Intel and Carbon Streaming

Given the investment horizon of 90 days Intel is expected to under-perform the Carbon Streaming. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 1.83 times less risky than Carbon Streaming. The stock trades about -0.07 of its potential returns per unit of risk. The Carbon Streaming Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  40.00  in Carbon Streaming Corp on September 21, 2024 and sell it today you would lose (7.00) from holding Carbon Streaming Corp or give up 17.5% of portfolio value over 90 days.

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

Intel  vs.  Carbon Streaming Corp

Intel

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Carbon Streaming Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carbon Streaming Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Intel and Carbon Streaming

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

The idea behind Intel and Carbon Streaming Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.