Correlation Between Intel and ProShares Short

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

By analyzing existing cross correlation between Intel and ProShares Short SmallCap600, you can compare the effects of market volatilities on Intel and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and ProShares Short.

Diversification Opportunities for Intel and ProShares Short

-0.67

Correlation Coefficient

Intel  ProShares Short

Excellent diversification

The 3 months correlation between Intel and ProShares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Intel and ProShares Short SmallCap600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Smal 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Smal has no effect on the direction of Intel i.e., Intel and ProShares Short go up and down completely randomly.

Pair Corralation between Intel and ProShares Short

Given the investment horizon of 90 days Intel is expected to generate 2.47 times more return on investment than ProShares Short. However, Intel is 2.47 times more volatile than ProShares Short SmallCap600. It trades about -0.01 of its potential returns per unit of risk. ProShares Short SmallCap600 is currently generating about -0.1 per unit of risk. If you would invest  2,062  in Intel on May 2, 2025 and sell it today you would lose (67.50) from holding Intel or give up 3.27% of portfolio value over 90 days.

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

Intel  vs.  ProShares Short SmallCap600

Intel

Risk-Adjusted Performance

Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

ProShares Short Smal

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Short SmallCap600 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Intel and ProShares Short

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

The idea behind Intel and ProShares Short SmallCap600 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.