Correlation Between Baran and Intel
Can any of the company-specific risk be diversified away by investing in both Baran 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 Baran and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baran Group and Intel, you can compare the effects of market volatilities on Baran 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 Baran with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baran and Intel.
Diversification Opportunities for Baran and Intel
Excellent diversification
The 3 months correlation between Baran and Intel is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Baran Group and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Baran 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 Baran 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 Baran i.e., Baran and Intel go up and down completely randomly.
Pair Corralation between Baran and Intel
Assuming the 90 days trading horizon Baran Group is expected to generate 0.85 times more return on investment than Intel. However, Baran Group is 1.18 times less risky than Intel. It trades about 0.13 of its potential returns per unit of risk. Intel is currently generating about -0.36 per unit of risk. If you would invest 105,000 in Baran Group on January 20, 2024 and sell it today you would earn a total of 5,200 from holding Baran Group or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Baran Group vs. Intel
Performance |
| Timeline |
| Baran Group |
| Intel |
Baran and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baran and Intel
The main advantage of trading using opposite Baran and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baran 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.| Baran vs. EN Shoham Business | Baran vs. Accel Solutions Group | Baran vs. Mivtach Shamir | Baran vs. Rani Zim Shopping |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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