Correlation Between SolarEdge Technologies and Intel

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

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

Diversification Opportunities for SolarEdge Technologies and Intel

0.64

Correlation Coefficient

SolarEdge Technologies  Intel

Poor diversification

The 3 months correlation between SolarEdge and Intel is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SolarEdge Technologies and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies i.e., SolarEdge Technologies and Intel go up and down completely randomly.

Pair Corralation between SolarEdge Technologies and Intel

Given the investment horizon of 90 days SolarEdge Technologies is expected to generate 1.28 times more return on investment than Intel. However, SolarEdge Technologies is 1.28 times more volatile than Intel. It trades about 0.07 of its potential returns per unit of risk. Intel is currently generating about 0.07 per unit of risk. If you would invest  1,357  in SolarEdge Technologies on December 29, 2024 and sell it today you would earn a total of  228.00  from holding SolarEdge Technologies or generate 16.8% return on investment over 90 days.

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

SolarEdge Technologies  vs.  Intel

SolarEdge Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SolarEdge Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, SolarEdge Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

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 rather unfluctuating basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SolarEdge Technologies and Intel

The main advantage of trading using opposite SolarEdge Technologies and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarEdge Technologies 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 SolarEdge Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.