Correlation Between Intel and Adobe Systems

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

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

Diversification Opportunities for Intel and Adobe Systems

-0.46

Correlation Coefficient

Intel  Adobe Systems

Very good diversification

The 3 months correlation between Intel and Adobe is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Adobe Systems Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Systems 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 Adobe Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Systems has no effect on the direction of Intel i.e., Intel and Adobe Systems go up and down completely randomly.

Pair Corralation between Intel and Adobe Systems

Given the investment horizon of 90 days Intel is expected to generate 1.84 times more return on investment than Adobe Systems. However, Intel is 1.84 times more volatile than Adobe Systems Incorporated. It trades about 0.02 of its potential returns per unit of risk. Adobe Systems Incorporated is currently generating about -0.02 per unit of risk. If you would invest  1,998  in Intel on May 1, 2025 and sell it today you would earn a total of  36.00  from holding Intel or generate 1.8% return on investment over 90 days.

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

Intel  vs.  Adobe Systems Incorporated

Intel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Adobe Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adobe Systems Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Adobe Systems is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Intel and Adobe Systems

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

The idea behind Intel and Adobe Systems Incorporated 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 Anywhere module to track or share privately all of your investments from the convenience of any device.