Correlation Between Intel and Alpha

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

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

Diversification Opportunities for Intel and Alpha

0.86

Correlation Coefficient

Intel  Alpha

Very poor diversification

The 3 months correlation between Intel and Alpha is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Alpha and Omega in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha and Omega 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 Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha and Omega has no effect on the direction of Intel i.e., Intel and Alpha go up and down completely randomly.

Pair Corralation between Intel and Alpha

Given the investment horizon of 90 days Intel is expected to generate 11.61 times less return on investment than Alpha. But when comparing it to its historical volatility, Intel is 1.15 times less risky than Alpha. It trades about 0.02 of its potential returns per unit of risk. Alpha and Omega is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,904  in Alpha and Omega on April 26, 2025 and sell it today you would earn a total of  824.00  from holding Alpha and Omega or generate 43.28% return on investment over 90 days.

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

Intel  vs.  Alpha and Omega

Intel

Risk-Adjusted Performance

Modest

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.

Alpha and Omega

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha and Omega are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Alpha disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Alpha

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

The idea behind Intel and Alpha and Omega 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.