Correlation Between Intel and Heartland Banccorp

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

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

Diversification Opportunities for Intel and Heartland Banccorp

-0.81

Correlation Coefficient

Intel  Heartland Banccorp

Pay attention - limited upside

The 3 months correlation between Intel and Heartland is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Heartland Banccorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Banccorp and Intel 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 Intel are associated (or correlated) with Heartland Banccorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Banccorp has no effect on the direction of Intel i.e., Intel and Heartland Banccorp go up and down completely randomly.

Pair Corralation between Intel and Heartland Banccorp

Given the investment horizon of 90 days Intel is expected to generate 1.55 times more return on investment than Heartland Banccorp. However, Intel is 1.55 times more volatile than Heartland Banccorp. It trades about 0.02 of its potential returns per unit of risk. Heartland Banccorp is currently generating about 0.03 per unit of risk. If you would invest  2,958  in Intel on February 22, 2024 and sell it today you would earn a total of  216.00  from holding Intel or generate 7.3% return on investment over 90 days.

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

Intel  vs.  Heartland Banccorp

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 inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Heartland Banccorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Heartland Banccorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Heartland Banccorp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Intel and Heartland Banccorp

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

The idea behind Intel and Heartland Banccorp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.