Correlation Between Intel and Wasatch Long/short

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

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

Diversification Opportunities for Intel and Wasatch Long/short

0.74

Correlation Coefficient

Intel  Wasatch Long/short

Poor diversification

The 3 months correlation between Intel and Wasatch is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Wasatch Longshort Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Longshort Alpha 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 Wasatch Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Longshort Alpha has no effect on the direction of Intel i.e., Intel and Wasatch Long/short go up and down completely randomly.

Pair Corralation between Intel and Wasatch Long/short

Given the investment horizon of 90 days Intel is expected to generate 2.93 times more return on investment than Wasatch Long/short. However, Intel is 2.93 times more volatile than Wasatch Longshort Alpha. It trades about 0.09 of its potential returns per unit of risk. Wasatch Longshort Alpha is currently generating about 0.0 per unit of risk. If you would invest  2,230  in Intel on August 31, 2024 and sell it today you would earn a total of  135.00  from holding Intel or generate 6.05% return on investment over 90 days.

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

Intel  vs.  Wasatch Longshort Alpha

Intel

Risk-Adjusted Performance

8 of 100

Insignificant

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 inconsistent basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Wasatch Longshort Alpha

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Longshort Alpha are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wasatch Long/short 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 Wasatch Long/short

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

The idea behind Intel and Wasatch Longshort Alpha 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.