Correlation Between Intel and Kaiser

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

By analyzing existing cross correlation between Intel and Kaiser Aluminum 4625, you can compare the effects of market volatilities on Intel and Kaiser 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 Kaiser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Kaiser.

Diversification Opportunities for Intel and Kaiser

0.32

Correlation Coefficient

Intel  Kaiser

Weak diversification

The 3 months correlation between Intel and Kaiser is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Kaiser Aluminum 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 4625 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 Kaiser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum 4625 has no effect on the direction of Intel i.e., Intel and Kaiser go up and down completely randomly.

Pair Corralation between Intel and Kaiser

Given the investment horizon of 90 days Intel is expected to generate 14.01 times more return on investment than Kaiser. However, Intel is 14.01 times more volatile than Kaiser Aluminum 4625. It trades about 0.09 of its potential returns per unit of risk. Kaiser Aluminum 4625 is currently generating about 0.13 per unit of risk. If you would invest  2,020  in Intel on December 22, 2024 and sell it today you would earn a total of  406.00  from holding Intel or generate 20.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

Intel  vs.  Kaiser Aluminum 4625

Intel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kaiser Aluminum 4625

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kaiser Aluminum 4625 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kaiser is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intel and Kaiser

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

The idea behind Intel and Kaiser Aluminum 4625 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.