Correlation Between Intel and Timberline Resources

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

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

Diversification Opportunities for Intel and Timberline Resources

-0.75

Correlation Coefficient

Intel  Timberline Resources

Pay attention - limited upside

The 3 months correlation between Intel and Timberline is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Timberline Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timberline 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 Timberline Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timberline Resources has no effect on the direction of Intel i.e., Intel and Timberline Resources go up and down completely randomly.

Pair Corralation between Intel and Timberline Resources

If you would invest  2,010  in Intel on September 3, 2024 and sell it today you would earn a total of  395.00  from holding Intel or generate 19.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Intel  vs.  Timberline Resources

Intel

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Timberline Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Timberline Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Timberline Resources is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intel and Timberline Resources

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

The idea behind Intel and Timberline 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.