Correlation Between Intel and Xenetic Biosciences

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

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

Diversification Opportunities for Intel and Xenetic Biosciences

-0.63

Correlation Coefficient

Intel  Xenetic Biosciences

Excellent diversification

The 3 months correlation between Intel and Xenetic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Xenetic Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenetic Biosciences 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 Xenetic Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenetic Biosciences has no effect on the direction of Intel i.e., Intel and Xenetic Biosciences go up and down completely randomly.

Pair Corralation between Intel and Xenetic Biosciences

If you would invest  1,940  in Intel on July 7, 2024 and sell it today you would earn a total of  319.00  from holding Intel or generate 16.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.35%
Values	Daily Returns

Intel  vs.  Xenetic Biosciences

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in November 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Xenetic Biosciences

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Xenetic Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Xenetic Biosciences showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Xenetic Biosciences

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

The idea behind Intel and Xenetic Biosciences 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.