Correlation Between Analog Devices and Intel
Can any of the company-specific risk be diversified away by investing in both Analog Devices and Intel 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 Analog Devices and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Intel, you can compare the effects of market volatilities on Analog Devices and Intel 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 Analog Devices with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Intel.
Diversification Opportunities for Analog Devices and Intel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Analog and Intel is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Analog Devices 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 Analog Devices are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Analog Devices i.e., Analog Devices and Intel go up and down completely randomly.
Pair Corralation between Analog Devices and Intel
Considering the 90-day investment horizon Analog Devices is expected to generate 0.78 times more return on investment than Intel. However, Analog Devices is 1.28 times less risky than Intel. It trades about 0.1 of its potential returns per unit of risk. Intel is currently generating about -0.34 per unit of risk. If you would invest 18,896 in Analog Devices on January 26, 2024 and sell it today you would earn a total of 754.00 from holding Analog Devices or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Intel
Performance |
| Timeline |
| Analog Devices |
| Intel |
Analog Devices and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Intel
The main advantage of trading using opposite Analog Devices and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip Technology |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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