Correlation Between Intel and 26875PAP6

Can any of the company-specific risk be diversified away by investing in both Intel and 26875PAP6 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 26875PAP6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and EOG RES INC, you can compare the effects of market volatilities on Intel and 26875PAP6 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 26875PAP6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and 26875PAP6.

Diversification Opportunities for Intel and 26875PAP6

0.31

Correlation Coefficient

Intel  26875PAP6

Weak diversification

The 3 months correlation between Intel and 26875PAP6 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Intel and EOG RES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOG RES INC 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 26875PAP6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOG RES INC has no effect on the direction of Intel i.e., Intel and 26875PAP6 go up and down completely randomly.

Pair Corralation between Intel and 26875PAP6

Given the investment horizon of 90 days Intel is expected to under-perform the 26875PAP6. In addition to that, Intel is 17.44 times more volatile than EOG RES INC. It trades about -0.02 of its total potential returns per unit of risk. EOG RES INC is currently generating about -0.09 per unit of volatility. If you would invest  9,953  in EOG RES INC on October 11, 2024 and sell it today you would lose (25.00) from holding EOG RES INC or give up 0.25% of portfolio value over 90 days.

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

Intel  vs.  EOG RES INC

Intel

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

EOG RES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EOG RES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26875PAP6 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 26875PAP6

The main advantage of trading using opposite Intel and 26875PAP6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, 26875PAP6 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 26875PAP6 will offset losses from the drop in 26875PAP6's long position.

The idea behind Intel and EOG RES INC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.