Correlation Between Intel and Chugai Pharmaceutical

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

By analyzing existing cross correlation between Intel and Chugai Pharmaceutical Co, you can compare the effects of market volatilities on Intel and Chugai Pharmaceutical 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 Chugai Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Chugai Pharmaceutical.

Diversification Opportunities for Intel and Chugai Pharmaceutical

0.33

Correlation Coefficient

Intel  Chugai Pharmaceutical

Weak diversification

The 3 months correlation between Intel and Chugai is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Chugai Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chugai Pharmaceutical 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 Chugai Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chugai Pharmaceutical has no effect on the direction of Intel i.e., Intel and Chugai Pharmaceutical go up and down completely randomly.

Pair Corralation between Intel and Chugai Pharmaceutical

Given the investment horizon of 90 days Intel is expected to under-perform the Chugai Pharmaceutical. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 1.25 times less risky than Chugai Pharmaceutical. The stock trades about -0.35 of its potential returns per unit of risk. The Chugai Pharmaceutical Co is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest  3,914  in Chugai Pharmaceutical Co on January 25, 2024 and sell it today you would lose (587.00) from holding Chugai Pharmaceutical Co or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  Chugai Pharmaceutical Co

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.

Chugai Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chugai Pharmaceutical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Intel and Chugai Pharmaceutical

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

The idea behind Intel and Chugai Pharmaceutical Co 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.