Correlation Between Starbucks and Intel
Can any of the company-specific risk be diversified away by investing in both Starbucks 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 Starbucks and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Starbucks and Intel, you can compare the effects of market volatilities on Starbucks 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 Starbucks with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starbucks and Intel.
Diversification Opportunities for Starbucks and Intel
Poor diversification
The 3 months correlation between Starbucks and Intel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Starbucks and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Starbucks 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 Starbucks 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 Starbucks i.e., Starbucks and Intel go up and down completely randomly.
Pair Corralation between Starbucks and Intel
Given the investment horizon of 90 days Starbucks is expected to generate 0.34 times more return on investment than Intel. However, Starbucks is 2.95 times less risky than Intel. It trades about -0.31 of its potential returns per unit of risk. Intel is currently generating about -0.33 per unit of risk. If you would invest 9,260 in Starbucks on January 20, 2024 and sell it today you would lose (545.00) from holding Starbucks or give up 5.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Starbucks vs. Intel
Performance |
| Timeline |
| Starbucks |
| Intel |
Starbucks and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Starbucks and Intel
The main advantage of trading using opposite Starbucks and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starbucks 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.| Starbucks vs. Chipotle Mexican Grill | Starbucks vs. Dominos Pizza | Starbucks vs. Yum Brands | Starbucks vs. The Wendys Co |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |