Correlation Between Intel and IShares NASDAQ

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

By analyzing existing cross correlation between Intel and iShares NASDAQ 100, you can compare the effects of market volatilities on Intel and IShares NASDAQ 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 IShares NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and IShares NASDAQ.

Diversification Opportunities for Intel and IShares NASDAQ

0.43

Correlation Coefficient

Intel  IShares NASDAQ

Very weak diversification

The 3 months correlation between Intel and IShares is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Intel and iShares NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares NASDAQ 100 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 IShares NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares NASDAQ 100 has no effect on the direction of Intel i.e., Intel and IShares NASDAQ go up and down completely randomly.

Pair Corralation between Intel and IShares NASDAQ

Given the investment horizon of 90 days Intel is expected to generate 4.72 times more return on investment than IShares NASDAQ. However, Intel is 4.72 times more volatile than iShares NASDAQ 100. It trades about 0.11 of its potential returns per unit of risk. iShares NASDAQ 100 is currently generating about 0.25 per unit of risk. If you would invest  2,055  in Intel on May 24, 2025 and sell it today you would earn a total of  425.00  from holding Intel or generate 20.68% return on investment over 90 days.

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

Intel  vs.  iShares NASDAQ 100

Intel

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

iShares NASDAQ 100

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares NASDAQ 100 are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, IShares NASDAQ may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Intel and IShares NASDAQ

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

The idea behind Intel and iShares NASDAQ 100 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.