Correlation Between IShares SP and Intel
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 IShares SP and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP Mid Cap and Intel, you can compare the effects of market volatilities on IShares SP 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 IShares SP with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Intel.
Diversification Opportunities for IShares SP and Intel
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Intel is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Mid Cap and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and IShares SP 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 iShares SP Mid Cap 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 IShares SP i.e., IShares SP and Intel go up and down completely randomly.
Pair Corralation between IShares SP and Intel
Considering the 90-day investment horizon iShares SP Mid Cap is expected to generate 0.32 times more return on investment than Intel. However, iShares SP Mid Cap is 3.09 times less risky than Intel. It trades about 0.07 of its potential returns per unit of risk. Intel is currently generating about -0.18 per unit of risk. If you would invest 8,492 in iShares SP Mid Cap on January 25, 2024 and sell it today you would earn a total of 207.00 from holding iShares SP Mid Cap or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP Mid Cap vs. Intel
Performance |
| Timeline |
| iShares SP Mid |
| Intel |
IShares SP and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and Intel
The main advantage of trading using opposite IShares SP and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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.| IShares SP vs. Vanguard Small Cap Growth | IShares SP vs. Vanguard Mid Cap Value | IShares SP vs. Vanguard Small Cap Value | IShares SP vs. Vanguard Mid Cap Index |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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