Correlation Between Roblon AS and Intel
Can any of the company-specific risk be diversified away by investing in both Roblon AS 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 Roblon AS and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roblon AS and Intel, you can compare the effects of market volatilities on Roblon AS 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 Roblon AS with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roblon AS and Intel.
Diversification Opportunities for Roblon AS and Intel
Poor diversification
The 3 months correlation between Roblon and Intel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Roblon AS and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Roblon AS 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 Roblon 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 Roblon AS i.e., Roblon AS and Intel go up and down completely randomly.
Pair Corralation between Roblon AS and Intel
Assuming the 90 days trading horizon Roblon AS is expected to under-perform the Intel. But the stock apears to be less risky and, when comparing its historical volatility, Roblon AS is 1.81 times less risky than Intel. The stock trades about -0.18 of its potential returns per unit of risk. The Intel is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,647 in Intel on January 24, 2024 and sell it today you would lose (206.00) from holding Intel or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Roblon AS vs. Intel
Performance |
| Timeline |
| Roblon AS |
| Intel |
Roblon AS and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roblon AS and Intel
The main advantage of trading using opposite Roblon AS and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roblon AS 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 Roblon 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.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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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