Correlation Between Intel and ATT

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

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

Diversification Opportunities for Intel and ATT

0.09

Correlation Coefficient

Intel  ATT

Significant diversification

The 3 months correlation between Intel and ATT is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Intel and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Intel i.e., Intel and ATT go up and down completely randomly.

Pair Corralation between Intel and ATT

Given the investment horizon of 90 days Intel is expected to generate 2.29 times more return on investment than ATT. However, Intel is 2.29 times more volatile than ATT Inc. It trades about 0.02 of its potential returns per unit of risk. ATT Inc is currently generating about 0.01 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  ATT Inc

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.

ATT Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ATT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intel and ATT

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

The idea behind Intel and ATT Inc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.