Correlation Between Select Sector and Intuit

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

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

Diversification Opportunities for Select Sector and Intuit

0.07

Correlation Coefficient

Select Sector  Intuit

Significant diversification

The 3 months correlation between Select and Intuit is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding The Select Sector and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc and Select Sector 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 The Select Sector are associated (or correlated) with Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Select Sector i.e., Select Sector and Intuit go up and down completely randomly.

Pair Corralation between Select Sector and Intuit

If you would invest  0.00  in Intuit Inc on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Intuit Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	2.63%
Values	Daily Returns

The Select Sector  vs.  Intuit Inc

Select Sector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Select Sector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Select Sector is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intuit Inc

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Select Sector and Intuit

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

The idea behind The Select Sector and Intuit Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..