Correlation Between Intel and Ideanomics

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

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

Diversification Opportunities for Intel and Ideanomics

0.56

Correlation Coefficient

Intel  Ideanomics

Very weak diversification

The 3 months correlation between Intel and Ideanomics is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Ideanomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideanomics 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 Ideanomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideanomics has no effect on the direction of Intel i.e., Intel and Ideanomics go up and down completely randomly.

Pair Corralation between Intel and Ideanomics

Given the investment horizon of 90 days Intel is expected to generate 0.59 times more return on investment than Ideanomics. However, Intel is 1.7 times less risky than Ideanomics. It trades about -0.29 of its potential returns per unit of risk. Ideanomics is currently generating about -0.22 per unit of risk. If you would invest  4,271  in Intel on January 16, 2024 and sell it today you would lose (640.00) from holding Intel or give up 14.98% of portfolio value over 90 days.

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

Intel  vs.  Ideanomics

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.

Ideanomics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ideanomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Intel and Ideanomics

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

The idea behind Intel and Ideanomics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.