Correlation Between Intel and Recharge Resources

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

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

Diversification Opportunities for Intel and Recharge Resources

0.31

Correlation Coefficient

Intel  Recharge Resources

Weak diversification

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

Pair Corralation between Intel and Recharge Resources

Given the investment horizon of 90 days Intel is expected to generate 547.35 times less return on investment than Recharge Resources. But when comparing it to its historical volatility, Intel is 46.68 times less risky than Recharge Resources. It trades about 0.01 of its potential returns per unit of risk. Recharge Resources is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  6.86  in Recharge Resources on December 1, 2024 and sell it today you would earn a total of  4.14  from holding Recharge Resources or generate 60.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Intel  vs.  Recharge Resources

Intel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Recharge Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Recharge Resources are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Recharge Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Recharge Resources

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

The idea behind Intel and Recharge Resources 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.