Correlation Between Nextracker and Intel

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

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

Diversification Opportunities for Nextracker and Intel

-0.08

Correlation Coefficient

Nextracker  Intel

Good diversification

The 3 months correlation between Nextracker and Intel is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Nextracker 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 Nextracker Class A 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 Nextracker i.e., Nextracker and Intel go up and down completely randomly.

Pair Corralation between Nextracker and Intel

Considering the 90-day investment horizon Nextracker Class A is expected to generate 1.05 times more return on investment than Intel. However, Nextracker is 1.05 times more volatile than Intel. It trades about 0.38 of its potential returns per unit of risk. Intel is currently generating about 0.14 per unit of risk. If you would invest  3,621  in Nextracker Class A on October 23, 2024 and sell it today you would earn a total of  808.00  from holding Nextracker Class A or generate 22.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Nextracker Class A  vs.  Intel

Nextracker Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nextracker Class A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Nextracker unveiled solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Nextracker and Intel

The main advantage of trading using opposite Nextracker and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextracker 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 Nextracker Class A 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.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.