Correlation Between Intel and Valens

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

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

Diversification Opportunities for Intel and Valens

-0.14

Correlation Coefficient

Intel  Valens

Good diversification

The 3 months correlation between Intel and Valens is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Intel i.e., Intel and Valens go up and down completely randomly.

Pair Corralation between Intel and Valens

Given the investment horizon of 90 days Intel is expected to generate 0.82 times more return on investment than Valens. However, Intel is 1.22 times less risky than Valens. It trades about 0.1 of its potential returns per unit of risk. Valens is currently generating about 0.08 per unit of risk. If you would invest  1,952  in Intel on December 20, 2024 and sell it today you would earn a total of  460.00  from holding Intel or generate 23.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  Valens

Intel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Valens

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valens are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile essential indicators, Valens displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Valens

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

The idea behind Intel and Valens 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.