Correlation Between Intel and ASTRAZENECA

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

By analyzing existing cross correlation between Intel and ASTRAZENECA PLC 4375, you can compare the effects of market volatilities on Intel and ASTRAZENECA 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 ASTRAZENECA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and ASTRAZENECA.

Diversification Opportunities for Intel and ASTRAZENECA

0.49

Correlation Coefficient

Intel  ASTRAZENECA

Very weak diversification

The 3 months correlation between Intel and ASTRAZENECA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Intel and ASTRAZENECA PLC 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTRAZENECA PLC 4375 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 ASTRAZENECA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTRAZENECA PLC 4375 has no effect on the direction of Intel i.e., Intel and ASTRAZENECA go up and down completely randomly.

Pair Corralation between Intel and ASTRAZENECA

Given the investment horizon of 90 days Intel is expected to generate 3.11 times more return on investment than ASTRAZENECA. However, Intel is 3.11 times more volatile than ASTRAZENECA PLC 4375. It trades about 0.0 of its potential returns per unit of risk. ASTRAZENECA PLC 4375 is currently generating about -0.03 per unit of risk. If you would invest  2,401  in Intel on November 20, 2024 and sell it today you would lose (41.00) from holding Intel or give up 1.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	72.88%
Values	Daily Returns

Intel  vs.  ASTRAZENECA PLC 4375

Intel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ASTRAZENECA PLC 4375

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASTRAZENECA PLC 4375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ASTRAZENECA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and ASTRAZENECA

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

The idea behind Intel and ASTRAZENECA PLC 4375 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.