Correlation Between Intel and Global X

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

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

Diversification Opportunities for Intel and Global X

-0.43

Correlation Coefficient

Intel  Global X

Very good diversification

The 3 months correlation between Intel and Global is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Global X Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Short 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Short has no effect on the direction of Intel i.e., Intel and Global X go up and down completely randomly.

Pair Corralation between Intel and Global X

Given the investment horizon of 90 days Intel is expected to under-perform the Global X. In addition to that, Intel is 49.74 times more volatile than Global X Short Term. It trades about -0.03 of its total potential returns per unit of risk. Global X Short Term is currently generating about 0.09 per unit of volatility. If you would invest  4,979  in Global X Short Term on September 12, 2024 and sell it today you would earn a total of  18.00  from holding Global X Short Term or generate 0.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	19.94%
Values	Daily Returns

Intel  vs.  Global X Short Term

Intel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Intel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global X Short

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Short Term are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Global X is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Intel and Global X

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

The idea behind Intel and Global X Short Term 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.