Correlation Between Intel and KROGER

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

By analyzing existing cross correlation between Intel and KROGER 8 percent, you can compare the effects of market volatilities on Intel and KROGER 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 KROGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and KROGER.

Diversification Opportunities for Intel and KROGER

0.47

Correlation Coefficient

Intel  KROGER

Very weak diversification

The 3 months correlation between Intel and KROGER is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Intel and KROGER 8 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KROGER 8 percent 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 KROGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KROGER 8 percent has no effect on the direction of Intel i.e., Intel and KROGER go up and down completely randomly.

Pair Corralation between Intel and KROGER

Given the investment horizon of 90 days Intel is expected to generate 9.32 times more return on investment than KROGER. However, Intel is 9.32 times more volatile than KROGER 8 percent. It trades about 0.07 of its potential returns per unit of risk. KROGER 8 percent is currently generating about 0.0 per unit of risk. If you would invest  1,982  in Intel on December 30, 2024 and sell it today you would earn a total of  289.00  from holding Intel or generate 14.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.94%
Values	Daily Returns

Intel  vs.  KROGER 8 percent

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

KROGER 8 percent

Risk-Adjusted Performance

Very Weak

Over the last 90 days KROGER 8 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KROGER 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 KROGER

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

The idea behind Intel and KROGER 8 percent 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 Global Correlations module to find global opportunities by holding instruments from different markets.