Correlation Between Paz Oil and Intel
Can any of the company-specific risk be diversified away by investing in both Paz Oil 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 Paz Oil and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paz Oil and Intel, you can compare the effects of market volatilities on Paz Oil 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 Paz Oil with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paz Oil and Intel.
Diversification Opportunities for Paz Oil and Intel
Excellent diversification
The 3 months correlation between Paz and Intel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Paz Oil and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Paz Oil 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 Paz Oil 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 Paz Oil i.e., Paz Oil and Intel go up and down completely randomly.
Pair Corralation between Paz Oil and Intel
Assuming the 90 days trading horizon Paz Oil is expected to generate 0.58 times more return on investment than Intel. However, Paz Oil is 1.72 times less risky than Intel. It trades about -0.15 of its potential returns per unit of risk. Intel is currently generating about -0.33 per unit of risk. If you would invest 3,837,776 in Paz Oil on January 25, 2024 and sell it today you would lose (146,776) from holding Paz Oil or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Paz Oil vs. Intel
Performance |
| Timeline |
| Paz Oil |
| Intel |
Paz Oil and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paz Oil and Intel
The main advantage of trading using opposite Paz Oil and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paz Oil 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.| Paz Oil vs. Delek Group | Paz Oil vs. Bank Hapoalim | Paz Oil vs. Bazan Oil Refineries | Paz Oil vs. Bezeq Israeli Telecommunication |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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