Correlation Between Intel and MicroAlgo

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

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

Diversification Opportunities for Intel and MicroAlgo

-0.14

Correlation Coefficient

Intel  MicroAlgo

Good diversification

The 3 months correlation between Intel and MicroAlgo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Intel and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Intel i.e., Intel and MicroAlgo go up and down completely randomly.

Pair Corralation between Intel and MicroAlgo

Given the investment horizon of 90 days Intel is expected to under-perform the MicroAlgo. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 16.7 times less risky than MicroAlgo. The stock trades about -0.01 of its potential returns per unit of risk. The MicroAlgo is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,023  in MicroAlgo on February 26, 2024 and sell it today you would lose (838.00) from holding MicroAlgo or give up 81.92% of portfolio value over 90 days.

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

Intel  vs.  MicroAlgo

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 June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MicroAlgo

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MicroAlgo are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, MicroAlgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and MicroAlgo

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

The idea behind Intel and MicroAlgo 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.