Correlation Between Intel and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Intel and OPC Energy 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 OPC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and OPC Energy, you can compare the effects of market volatilities on Intel and OPC Energy 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 OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and OPC Energy.
Diversification Opportunities for Intel and OPC Energy
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intel and OPC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Intel and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy 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 OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Intel i.e., Intel and OPC Energy go up and down completely randomly.
Pair Corralation between Intel and OPC Energy
Given the investment horizon of 90 days Intel is expected to under-perform the OPC Energy. In addition to that, Intel is 1.06 times more volatile than OPC Energy. It trades about -0.15 of its total potential returns per unit of risk. OPC Energy is currently generating about 0.08 per unit of volatility. If you would invest 265,000 in OPC Energy on January 26, 2024 and sell it today you would earn a total of 20,000 from holding OPC Energy or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.42% |
| Values | Daily Returns |
Intel vs. OPC Energy
Performance |
| Timeline |
| Intel |
| OPC Energy |
Intel and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and OPC Energy
The main advantage of trading using opposite Intel and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| OPC Energy vs. Energix Renewable Energies | OPC Energy vs. Doral Group Renewable | OPC Energy vs. Elbit Systems | OPC Energy vs. Electreon Wireless |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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