Correlation Between Intel and Otsuka Holdings

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

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

Diversification Opportunities for Intel and Otsuka Holdings

0.63

Correlation Coefficient

Intel  Otsuka Holdings

Poor diversification

The 3 months correlation between Intel and Otsuka is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Otsuka Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka Holdings 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 Otsuka Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka Holdings has no effect on the direction of Intel i.e., Intel and Otsuka Holdings go up and down completely randomly.

Pair Corralation between Intel and Otsuka Holdings

Given the investment horizon of 90 days Intel is expected to generate 2.96 times more return on investment than Otsuka Holdings. However, Intel is 2.96 times more volatile than Otsuka Holdings Co. It trades about -0.08 of its potential returns per unit of risk. Otsuka Holdings Co is currently generating about -0.5 per unit of risk. If you would invest  2,081  in Intel on October 10, 2024 and sell it today you would lose (93.00) from holding Intel or give up 4.47% of portfolio value over 90 days.

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

Intel  vs.  Otsuka Holdings Co

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Otsuka Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Otsuka Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Intel and Otsuka Holdings

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

The idea behind Intel and Otsuka Holdings Co 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.