Correlation Between Advanced Micro and Intel

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

By analyzing existing cross correlation between Advanced Micro Devices and Intel, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Intel.

Diversification Opportunities for Advanced Micro and Intel

0.21

Correlation Coefficient

Advanced Micro  Intel

Modest diversification

The 3 months correlation between Advanced and Intel is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Advanced Micro 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 Advanced Micro 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 Advanced Micro i.e., Advanced Micro and Intel go up and down completely randomly.

Pair Corralation between Advanced Micro and Intel

Considering the 90-day investment horizon Advanced Micro Devices is expected to generate 1.0 times more return on investment than Intel. However, Advanced Micro is 1.0 times more volatile than Intel. It trades about 0.28 of its potential returns per unit of risk. Intel is currently generating about -0.05 per unit of risk. If you would invest  10,812  in Advanced Micro Devices on May 10, 2025 and sell it today you would earn a total of  6,464  from holding Advanced Micro Devices or generate 59.79% return on investment over 90 days.

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

Advanced Micro Devices  vs.  Intel

Advanced Micro Devices

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Advanced Micro exhibited solid returns over the last few months and may actually be approaching a breakup point.

Intel

Risk-Adjusted Performance

Weakest

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Advanced Micro and Intel

The main advantage of trading using opposite Advanced Micro and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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 Advanced Micro Devices 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.