Correlation Between Prime Office and Intel
Can any of the company-specific risk be diversified away by investing in both Prime Office 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 Prime Office and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Office AS and Intel, you can compare the effects of market volatilities on Prime Office 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 Prime Office with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Office and Intel.
Diversification Opportunities for Prime Office and Intel
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prime and Intel is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Prime Office AS and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Prime Office 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 Prime Office 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 Prime Office i.e., Prime Office and Intel go up and down completely randomly.
Pair Corralation between Prime Office and Intel
Assuming the 90 days trading horizon Prime Office AS is expected to under-perform the Intel. In addition to that, Prime Office is 1.18 times more volatile than Intel. It trades about -0.02 of its total potential returns per unit of risk. Intel is currently generating about -0.01 per unit of volatility. If you would invest 4,395 in Intel on January 24, 2024 and sell it today you would lose (954.00) from holding Intel or give up 21.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Prime Office AS vs. Intel
Performance |
| Timeline |
| Prime Office AS |
| Intel |
Prime Office and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Office and Intel
The main advantage of trading using opposite Prime Office and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Office 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.| Prime Office vs. Djurslands Bank | Prime Office vs. North Media AS | Prime Office vs. First Farms AS | Prime Office vs. Flgger group AS |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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