Correlation Between Intel and Heartland Banccorp

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

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

Diversification Opportunities for Intel and Heartland Banccorp

-0.93

Correlation Coefficient

Intel  Heartland Banccorp

Pay attention - limited upside

The 3 months correlation between Intel and Heartland is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Heartland Banccorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Banccorp 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 Heartland Banccorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Banccorp has no effect on the direction of Intel i.e., Intel and Heartland Banccorp go up and down completely randomly.

Pair Corralation between Intel and Heartland Banccorp

Given the investment horizon of 90 days Intel is expected to under-perform the Heartland Banccorp. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 1.41 times less risky than Heartland Banccorp. The stock trades about -0.12 of its potential returns per unit of risk. The Heartland Banccorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,479  in Heartland Banccorp on June 22, 2024 and sell it today you would earn a total of  6,321  from holding Heartland Banccorp or generate 74.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  Heartland Banccorp

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 conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in October 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Heartland Banccorp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heartland Banccorp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Heartland Banccorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Heartland Banccorp

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

The idea behind Intel and Heartland Banccorp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.