Correlation Between Yancoal Australia and Intel

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

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

Diversification Opportunities for Yancoal Australia and Intel

0.22

Correlation Coefficient

Yancoal Australia  Intel

Modest diversification

The 3 months correlation between Yancoal and Intel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Yancoal Australia 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 Yancoal Australia 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 Yancoal Australia i.e., Yancoal Australia and Intel go up and down completely randomly.

Pair Corralation between Yancoal Australia and Intel

Assuming the 90 days trading horizon Yancoal Australia is expected to generate 1.12 times less return on investment than Intel. But when comparing it to its historical volatility, Yancoal Australia is 1.38 times less risky than Intel. It trades about 0.01 of its potential returns per unit of risk. Intel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,043  in Intel on October 8, 2024 and sell it today you would lose (44.00) from holding Intel or give up 2.15% of portfolio value over 90 days.

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

Yancoal Australia  vs.  Intel

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Yancoal Australia is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 comparatively stable essential indicators, Intel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Yancoal Australia and Intel

The main advantage of trading using opposite Yancoal Australia and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia 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 Yancoal Australia 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.