Correlation Between Intel and 3i Group

Can any of the company-specific risk be diversified away by investing in both Intel and 3i Group 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 3i Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and 3i Group plc, you can compare the effects of market volatilities on Intel and 3i Group 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 3i Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and 3i Group.

Diversification Opportunities for Intel and 3i Group

-0.63

Correlation Coefficient

Intel  3i Group

Excellent diversification

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

Pair Corralation between Intel and 3i Group

Given the investment horizon of 90 days Intel is expected to under-perform the 3i Group. In addition to that, Intel is 3.64 times more volatile than 3i Group plc. It trades about -0.58 of its total potential returns per unit of risk. 3i Group plc is currently generating about -0.04 per unit of volatility. If you would invest  3,613  in 3i Group plc on February 1, 2024 and sell it today you would lose (29.00) from holding 3i Group plc or give up 0.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  3i Group plc

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

3i Group plc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 3i Group plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, 3i Group may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Intel and 3i Group

The main advantage of trading using opposite Intel and 3i Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, 3i Group 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 3i Group will offset losses from the drop in 3i Group's long position.

The idea behind Intel and 3i Group plc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.