Correlation Between State Street and Intel
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Emerging and Intel, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Intel.
Diversification Opportunities for State Street and Intel
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and Intel is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding State Street Emerging and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and State Street 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 State Street Emerging 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 State Street i.e., State Street and Intel go up and down completely randomly.
Pair Corralation between State Street and Intel
Assuming the 90 days horizon State Street Emerging is expected to generate 0.29 times more return on investment than Intel. However, State Street Emerging is 3.5 times less risky than Intel. It trades about -0.08 of its potential returns per unit of risk. Intel is currently generating about -0.29 per unit of risk. If you would invest 6,227 in State Street Emerging on January 19, 2024 and sell it today you would lose (88.00) from holding State Street Emerging or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
State Street Emerging vs. Intel
Performance |
| Timeline |
| State Street Emerging |
| Intel |
State Street and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Intel
The main advantage of trading using opposite State Street and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Vanguard Emerging Markets | State Street vs. Vanguard Emerging Markets | State Street vs. American Funds New | State Street vs. American Funds New |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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