Correlation Between Intel and Atco Mining

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

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

Diversification Opportunities for Intel and Atco Mining

-0.33

Correlation Coefficient

Intel  Atco Mining

Very good diversification

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

Pair Corralation between Intel and Atco Mining

Given the investment horizon of 90 days Intel is expected to generate 3.97 times less return on investment than Atco Mining. But when comparing it to its historical volatility, Intel is 5.9 times less risky than Atco Mining. It trades about 0.12 of its potential returns per unit of risk. Atco Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.30  in Atco Mining on September 3, 2024 and sell it today you would earn a total of  0.02  from holding Atco Mining or generate 1.54% return on investment over 90 days.

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

Intel  vs.  Atco Mining

Intel

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atco Mining

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Atco Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Atco Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Atco Mining

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

The idea behind Intel and Atco Mining 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.