Correlation Between Intel and Gold Terra

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

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

Diversification Opportunities for Intel and Gold Terra

-0.42

Correlation Coefficient

Intel  Gold Terra

Very good diversification

The 3 months correlation between Intel and Gold is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Gold Terra Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Terra Resource 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 Gold Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Terra Resource has no effect on the direction of Intel i.e., Intel and Gold Terra go up and down completely randomly.

Pair Corralation between Intel and Gold Terra

Given the investment horizon of 90 days Intel is expected to generate 0.52 times more return on investment than Gold Terra. However, Intel is 1.93 times less risky than Gold Terra. It trades about 0.09 of its potential returns per unit of risk. Gold Terra Resource is currently generating about 0.04 per unit of risk. If you would invest  1,982  in Intel on December 28, 2024 and sell it today you would earn a total of  380.00  from holding Intel or generate 19.17% return on investment over 90 days.

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

Intel  vs.  Gold Terra Resource

Intel

Risk-Adjusted Performance

Modest

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

Gold Terra Resource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Terra Resource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Gold Terra reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Gold Terra

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

The idea behind Intel and Gold Terra Resource 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.