Correlation Between Intel and UTA Acquisition

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

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

Diversification Opportunities for Intel and UTA Acquisition

0.61

Correlation Coefficient

Intel  UTA Acquisition

Poor diversification

The 3 months correlation between Intel and UTA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Intel and UTA Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTA Acquisition 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 UTA Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTA Acquisition has no effect on the direction of Intel i.e., Intel and UTA Acquisition go up and down completely randomly.

Pair Corralation between Intel and UTA Acquisition

If you would invest  2,020  in Intel on October 22, 2024 and sell it today you would earn a total of  129.00  from holding Intel or generate 6.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

Intel  vs.  UTA Acquisition

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 rather sound basic indicators, Intel is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

UTA Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UTA Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, UTA Acquisition is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Intel and UTA Acquisition

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

The idea behind Intel and UTA Acquisition 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.