Correlation Between Intel and Xperi Corp

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

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

Diversification Opportunities for Intel and Xperi Corp

-0.79

Correlation Coefficient

Intel  Xperi Corp

Pay attention - limited upside

The 3 months correlation between Intel and Xperi is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Xperi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xperi Corp 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 Xperi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xperi Corp has no effect on the direction of Intel i.e., Intel and Xperi Corp go up and down completely randomly.

Pair Corralation between Intel and Xperi Corp

Given the investment horizon of 90 days Intel is expected to under-perform the Xperi Corp. In addition to that, Intel is 1.15 times more volatile than Xperi Corp. It trades about -0.09 of its total potential returns per unit of risk. Xperi Corp is currently generating about 0.0 per unit of volatility. If you would invest  1,120  in Xperi Corp on October 7, 2024 and sell it today you would lose (86.00) from holding Xperi Corp or give up 7.68% of portfolio value over 90 days.

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

Intel  vs.  Xperi Corp

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Xperi Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xperi Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Xperi Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Xperi Corp

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

The idea behind Intel and Xperi Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.