Correlation Between Intel and ChemoCentryx

Can any of the company-specific risk be diversified away by investing in both Intel and ChemoCentryx 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 Intel and ChemoCentryx into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and ChemoCentryx, you can compare the effects of market volatilities on Intel and ChemoCentryx 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 Intel with a short position of ChemoCentryx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and ChemoCentryx.

Diversification Opportunities for Intel and ChemoCentryx

-0.41

Correlation Coefficient

Intel  ChemoCentryx

Very good diversification

The 3 months correlation between Intel and ChemoCentryx is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Intel and ChemoCentryx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChemoCentryx and Intel 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 Intel are associated (or correlated) with ChemoCentryx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChemoCentryx has no effect on the direction of Intel i.e., Intel and ChemoCentryx go up and down completely randomly.

Pair Corralation between Intel and ChemoCentryx

Given the investment horizon of 90 days Intel is expected to under-perform the ChemoCentryx. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 4.32 times less risky than ChemoCentryx. The stock trades about 0.0 of its potential returns per unit of risk. The ChemoCentryx is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,738  in ChemoCentryx on January 26, 2024 and sell it today you would earn a total of  3,461  from holding ChemoCentryx or generate 199.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	23.68%
Values	Daily Returns

Intel  vs.  ChemoCentryx

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ChemoCentryx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChemoCentryx has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ChemoCentryx is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Intel and ChemoCentryx

The main advantage of trading using opposite Intel and ChemoCentryx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, ChemoCentryx 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 ChemoCentryx will offset losses from the drop in ChemoCentryx's long position.

The idea behind Intel and ChemoCentryx 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.