Correlation Between American Financial and Intel
Can any of the company-specific risk be diversified away by investing in both American Financial 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 American Financial and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Financial Group and Intel, you can compare the effects of market volatilities on American Financial 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 American Financial with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Financial and Intel.
Diversification Opportunities for American Financial and Intel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Intel is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Financial Group and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and American Financial 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 American Financial Group 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 American Financial i.e., American Financial and Intel go up and down completely randomly.
Pair Corralation between American Financial and Intel
Considering the 90-day investment horizon American Financial Group is expected to generate 0.47 times more return on investment than Intel. However, American Financial Group is 2.11 times less risky than Intel. It trades about 0.17 of its potential returns per unit of risk. Intel is currently generating about 0.0 per unit of risk. If you would invest 10,258 in American Financial Group on January 25, 2024 and sell it today you would earn a total of 2,714 from holding American Financial Group or generate 26.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Financial Group vs. Intel
Performance |
| Timeline |
| American Financial |
| Intel |
American Financial and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Financial and Intel
The main advantage of trading using opposite American Financial and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Financial 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.| American Financial vs. Selective Insurance Group | American Financial vs. Horace Mann Educators | American Financial vs. Kemper | American Financial vs. ProAssurance |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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