Correlation Between Intel and Photronics

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

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

Diversification Opportunities for Intel and Photronics

0.48

Correlation Coefficient

Intel  Photronics

Very weak diversification

The 3 months correlation between Intel and Photronics is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Photronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photronics 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 Photronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photronics has no effect on the direction of Intel i.e., Intel and Photronics go up and down completely randomly.

Pair Corralation between Intel and Photronics

Given the investment horizon of 90 days Intel is expected to generate 3.24 times less return on investment than Photronics. But when comparing it to its historical volatility, Intel is 1.06 times less risky than Photronics. It trades about 0.03 of its potential returns per unit of risk. Photronics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,827  in Photronics on April 30, 2025 and sell it today you would earn a total of  285.00  from holding Photronics or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Intel  vs.  Photronics

Intel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 2 (%) 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.

Photronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Photronics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Photronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and Photronics

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

The idea behind Intel and Photronics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.