Correlation Between FIBRA Storage and Intel

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

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

Diversification Opportunities for FIBRA Storage and Intel

-0.05

Correlation Coefficient

FIBRA Storage  Intel

Good diversification

The 3 months correlation between FIBRA and Intel is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage i.e., FIBRA Storage and Intel go up and down completely randomly.

Pair Corralation between FIBRA Storage and Intel

Assuming the 90 days trading horizon FIBRA Storage is expected to generate 0.38 times more return on investment than Intel. However, FIBRA Storage is 2.62 times less risky than Intel. It trades about 0.02 of its potential returns per unit of risk. Intel is currently generating about -0.03 per unit of risk. If you would invest  1,719  in FIBRA Storage on September 26, 2024 and sell it today you would earn a total of  69.00  from holding FIBRA Storage or generate 4.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.68%
Values	Daily Returns

FIBRA Storage  vs.  Intel

FIBRA Storage

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited 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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with FIBRA Storage and Intel

The main advantage of trading using opposite FIBRA Storage and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIBRA Storage 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 FIBRA Storage 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.