Correlation Between Intel and 502413BE6

Can any of the company-specific risk be diversified away by investing in both Intel and 502413BE6 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 502413BE6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and L3 TECHNOLOGIES INC, you can compare the effects of market volatilities on Intel and 502413BE6 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 502413BE6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and 502413BE6.

Diversification Opportunities for Intel and 502413BE6

-0.37

Correlation Coefficient

Intel  502413BE6

Very good diversification

The 3 months correlation between Intel and 502413BE6 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Intel and L3 TECHNOLOGIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3 TECHNOLOGIES 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 502413BE6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3 TECHNOLOGIES INC has no effect on the direction of Intel i.e., Intel and 502413BE6 go up and down completely randomly.

Pair Corralation between Intel and 502413BE6

Given the investment horizon of 90 days Intel is expected to generate 1.96 times more return on investment than 502413BE6. However, Intel is 1.96 times more volatile than L3 TECHNOLOGIES INC. It trades about -0.04 of its potential returns per unit of risk. L3 TECHNOLOGIES INC is currently generating about -0.16 per unit of risk. If you would invest  2,238  in Intel on October 5, 2024 and sell it today you would lose (216.00) from holding Intel or give up 9.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.81%
Values	Daily Returns

Intel  vs.  L3 TECHNOLOGIES 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 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.

L3 TECHNOLOGIES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days L3 TECHNOLOGIES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for L3 TECHNOLOGIES INC investors.

Pair Trading with Intel and 502413BE6

The main advantage of trading using opposite Intel and 502413BE6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, 502413BE6 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 502413BE6 will offset losses from the drop in 502413BE6's long position.

The idea behind Intel and L3 TECHNOLOGIES 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.