Correlation Between Intel and KINDER

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

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

Diversification Opportunities for Intel and KINDER

-0.36

Correlation Coefficient

Intel  KINDER

Very good diversification

The 3 months correlation between Intel and KINDER is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intel and KINDER MORGAN FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN FIN 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 KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN FIN has no effect on the direction of Intel i.e., Intel and KINDER go up and down completely randomly.

Pair Corralation between Intel and KINDER

Given the investment horizon of 90 days Intel is expected to under-perform the KINDER. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 1.16 times less risky than KINDER. The stock trades about -0.01 of its potential returns per unit of risk. The KINDER MORGAN FIN is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  10,176  in KINDER MORGAN FIN on October 5, 2024 and sell it today you would earn a total of  202.00  from holding KINDER MORGAN FIN or generate 1.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	20.81%
Values	Daily Returns

Intel  vs.  KINDER MORGAN FIN

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 latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

KINDER MORGAN FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KINDER MORGAN FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KINDER 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 KINDER

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

The idea behind Intel and KINDER MORGAN FIN 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 Stocks Directory module to find actively traded stocks across global markets.