Correlation Between Wise Group and Intel
Can any of the company-specific risk be diversified away by investing in both Wise Group 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 Wise Group and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wise Group AB and Intel, you can compare the effects of market volatilities on Wise Group 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 Wise Group with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wise Group and Intel.
Diversification Opportunities for Wise Group and Intel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wise and Intel is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Wise Group AB and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Wise Group 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 Wise Group AB 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 Wise Group i.e., Wise Group and Intel go up and down completely randomly.
Pair Corralation between Wise Group and Intel
Assuming the 90 days trading horizon Wise Group AB is expected to under-perform the Intel. In addition to that, Wise Group is 1.28 times more volatile than Intel. It trades about -0.05 of its total potential returns per unit of risk. Intel is currently generating about 0.06 per unit of volatility. If you would invest 2,459 in Intel on January 24, 2024 and sell it today you would earn a total of 969.00 from holding Intel or generate 39.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wise Group AB vs. Intel
Performance |
| Timeline |
| Wise Group AB |
| Intel |
Wise Group and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wise Group and Intel
The main advantage of trading using opposite Wise Group and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wise Group 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.The idea behind Wise Group AB and Intel 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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