Correlation Between Intel and Midwest Holding
Can any of the company-specific risk be diversified away by investing in both Intel and Midwest Holding 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 Midwest Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Midwest Holding, you can compare the effects of market volatilities on Intel and Midwest Holding 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 Midwest Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Midwest Holding.
Diversification Opportunities for Intel and Midwest Holding
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Intel and Midwest is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Midwest Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midwest Holding 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 Midwest Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midwest Holding has no effect on the direction of Intel i.e., Intel and Midwest Holding go up and down completely randomly.
Pair Corralation between Intel and Midwest Holding
Given the investment horizon of 90 days Intel is expected to under-perform the Midwest Holding. But the stock apears to be less risky and, when comparing its historical volatility, Intel is 2.48 times less risky than Midwest Holding. The stock trades about 0.0 of its potential returns per unit of risk. The Midwest Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,192 in Midwest Holding on March 28, 2024 and sell it today you would earn a total of 1,459 from holding Midwest Holding or generate 122.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 53.23% |
Values | Daily Returns |
Intel vs. Midwest Holding
Performance |
Timeline |
Intel |
Midwest Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intel and Midwest Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Intel and Midwest Holding
The main advantage of trading using opposite Intel and Midwest Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Midwest Holding 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 Midwest Holding will offset losses from the drop in Midwest Holding's long position.The idea behind Intel and Midwest Holding 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.Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. Brighthouse Financial | Midwest Holding vs. FG Annuities Life | Midwest Holding vs. CNO Financial Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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