Two Equities Correlation Analysis
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Intel and NYSE Composite
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intel and NYSE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Intel and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Intel i.e., Intel and NYSE Composite go up and down completely randomly.
Pair Corralation between Intel and NYSE Composite
Given the investment horizon of 90 days Intel is expected to under-perform the NYSE Composite. In addition to that, Intel is 3.98 times more volatile than NYSE Composite. It trades about -0.31 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.02 per unit of volatility. If you would invest 1,788,962 in NYSE Composite on February 7, 2024 and sell it today you would earn a total of 7,422 from holding NYSE Composite or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. NYSE Composite
Performance |
| Timeline |
Intel and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Intel
Pair trading matchups for Intel
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Intel and NYSE Composite
The main advantage of trading using opposite Intel and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind Intel and NYSE Composite 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.| NYSE Composite vs. ServiceNow | NYSE Composite vs. AMCON Distributing | NYSE Composite vs. National CineMedia | NYSE Composite vs. BOS Better Online |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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