Correlation Between Brd Klee and Intel
Can any of the company-specific risk be diversified away by investing in both Brd Klee 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 Brd Klee and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brd Klee AS and Intel, you can compare the effects of market volatilities on Brd Klee 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 Brd Klee with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brd Klee and Intel.
Diversification Opportunities for Brd Klee and Intel
Very good diversification
The 3 months correlation between Brd and Intel is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Brd Klee AS and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Brd Klee 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 Brd Klee AS 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 Brd Klee i.e., Brd Klee and Intel go up and down completely randomly.
Pair Corralation between Brd Klee and Intel
Assuming the 90 days trading horizon Brd Klee AS is expected to generate 2.27 times more return on investment than Intel. However, Brd Klee is 2.27 times more volatile than Intel. It trades about 0.07 of its potential returns per unit of risk. Intel is currently generating about -0.33 per unit of risk. If you would invest 380,000 in Brd Klee AS on January 25, 2024 and sell it today you would earn a total of 18,000 from holding Brd Klee AS or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Brd Klee AS vs. Intel
Performance |
| Timeline |
| Brd Klee AS |
| Intel |
Brd Klee and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brd Klee and Intel
The main advantage of trading using opposite Brd Klee and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brd Klee 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.The idea behind Brd Klee AS and Intel 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.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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