Correlation Between Intel and Insmed

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Intel and Insmed 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 Insmed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Insmed Inc, you can compare the effects of market volatilities on Intel and Insmed 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 Insmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Insmed.

Diversification Opportunities for Intel and Insmed

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Intel and Insmed is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Insmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insmed Inc 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 Insmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insmed Inc has no effect on the direction of Intel i.e., Intel and Insmed go up and down completely randomly.

Pair Corralation between Intel and Insmed

Given the investment horizon of 90 days Intel is expected to under-perform the Insmed. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 2.16 times less risky than Insmed. The stock trades about -0.12 of its potential returns per unit of risk. The Insmed Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,817  in Insmed Inc on November 30, 2023 and sell it today you would lose (14.00) from holding Insmed Inc or give up 0.5% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Intel  vs.  Insmed Inc

 Performance 
       Timeline  
Intel 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 rather sound basic indicators, Intel is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Insmed Inc 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Insmed Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Insmed displayed solid returns over the last few months and may actually be approaching a breakup point.

Intel and Insmed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel and Insmed

The main advantage of trading using opposite Intel and Insmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Insmed 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 Insmed will offset losses from the drop in Insmed's long position.
The idea behind Intel and Insmed Inc 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

Other Complementary Tools

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities