Correlation Between Intel and WH Group

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Can any of the company-specific risk be diversified away by investing in both Intel and WH Group 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 WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and WH Group Limited, you can compare the effects of market volatilities on Intel and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and WH Group.

Diversification Opportunities for Intel and WH Group

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Intel and WHGRF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Intel and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of Intel i.e., Intel and WH Group go up and down completely randomly.

Pair Corralation between Intel and WH Group

Given the investment horizon of 90 days Intel is expected to under-perform the WH Group. In addition to that, Intel is 2.45 times more volatile than WH Group Limited. It trades about -0.07 of its total potential returns per unit of risk. WH Group Limited is currently generating about -0.04 per unit of volatility. If you would invest  80.00  in WH Group Limited on September 6, 2024 and sell it today you would lose (1.00) from holding WH Group Limited or give up 1.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Intel  vs.  WH Group Limited

 Performance 
       Timeline  
Intel 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 7 (%) 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.
WH Group Limited 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in WH Group Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, WH Group reported solid returns over the last few months and may actually be approaching a breakup point.

Intel and WH Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel and WH Group

The main advantage of trading using opposite Intel and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.
The idea behind Intel and WH Group Limited 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.
Check out your portfolio center.
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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