Correlation Between Intel and AMERICAN

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

By analyzing existing cross correlation between Intel and AMERICAN EXPRESS 405, you can compare the effects of market volatilities on Intel and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and AMERICAN.

Diversification Opportunities for Intel and AMERICAN

0.0

Correlation Coefficient

Intel  AMERICAN

Pay attention - limited upside

The 3 months correlation between Intel and AMERICAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intel and AMERICAN EXPRESS 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS 405 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS 405 has no effect on the direction of Intel i.e., Intel and AMERICAN go up and down completely randomly.

Pair Corralation between Intel and AMERICAN

If you would invest  1,936  in Intel on September 12, 2024 and sell it today you would earn a total of  80.00  from holding Intel or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Intel  vs.  AMERICAN EXPRESS 405

Intel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AMERICAN EXPRESS 405

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMERICAN EXPRESS 405 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMERICAN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and AMERICAN

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

The idea behind Intel and AMERICAN EXPRESS 405 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.