Correlation Between SalMar ASA and Intel

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

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

Diversification Opportunities for SalMar ASA and Intel

0.29

Correlation Coefficient

SalMar ASA  Intel

Modest diversification

The 3 months correlation between SalMar and Intel is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SalMar ASA and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and SalMar ASA 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 SalMar ASA are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of SalMar ASA i.e., SalMar ASA and Intel go up and down completely randomly.

Pair Corralation between SalMar ASA and Intel

Assuming the 90 days horizon SalMar ASA is expected to generate 39.44 times less return on investment than Intel. But when comparing it to its historical volatility, SalMar ASA is 2.5 times less risky than Intel. It trades about 0.0 of its potential returns per unit of risk. Intel is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,935  in Intel on December 29, 2024 and sell it today you would earn a total of  247.00  from holding Intel or generate 12.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

SalMar ASA  vs.  Intel

SalMar ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SalMar ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SalMar ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Intel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SalMar ASA and Intel

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

The idea behind SalMar ASA and Intel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.