Correlation Between Intel and Trans Global

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

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

Diversification Opportunities for Intel and Trans Global

0.12

Correlation Coefficient

Intel  Trans Global

Average diversification

The 3 months correlation between Intel and Trans is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Trans Global Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trans Global Grp 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 Trans Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trans Global Grp has no effect on the direction of Intel i.e., Intel and Trans Global go up and down completely randomly.

Pair Corralation between Intel and Trans Global

Given the investment horizon of 90 days Intel is expected to generate 21.9 times less return on investment than Trans Global. But when comparing it to its historical volatility, Intel is 11.27 times less risky than Trans Global. It trades about 0.12 of its potential returns per unit of risk. Trans Global Grp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Trans Global Grp on December 2, 2024 and sell it today you would earn a total of  0.01  from holding Trans Global Grp or generate 100.0% return on investment over 90 days.

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

Intel  vs.  Trans Global Grp

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.

Trans Global Grp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Trans Global Grp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical and fundamental indicators, Trans Global demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Trans Global

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

The idea behind Intel and Trans Global Grp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.