Correlation Between Intel and Invesco DB

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

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

Diversification Opportunities for Intel and Invesco DB

0.57

Correlation Coefficient

Intel  Invesco DB

Very weak diversification

The 3 months correlation between Intel and Invesco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Invesco DB Dollar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DB Dollar 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 Invesco DB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DB Dollar has no effect on the direction of Intel i.e., Intel and Invesco DB go up and down completely randomly.

Pair Corralation between Intel and Invesco DB

Given the investment horizon of 90 days Intel is expected to generate 8.55 times more return on investment than Invesco DB. However, Intel is 8.55 times more volatile than Invesco DB Dollar. It trades about 0.09 of its potential returns per unit of risk. Invesco DB Dollar is currently generating about 0.14 per unit of risk. If you would invest  1,982  in Intel on December 28, 2024 and sell it today you would earn a total of  380.00  from holding Intel or generate 19.17% return on investment over 90 days.

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

Intel  vs.  Invesco DB Dollar

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Invesco DB Dollar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco DB Dollar are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Invesco DB is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Intel and Invesco DB

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

The idea behind Intel and Invesco DB Dollar 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.