Correlation Between Lumen Technologies and Intel

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

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

Diversification Opportunities for Lumen Technologies and Intel

0.71

Correlation Coefficient

Lumen Technologies  Intel

Poor diversification

The 3 months correlation between Lumen and Intel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Lumen Technologies 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 Lumen Technologies are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Intel go up and down completely randomly.

Pair Corralation between Lumen Technologies and Intel

Given the investment horizon of 90 days Lumen Technologies is expected to under-perform the Intel. In addition to that, Lumen Technologies is 1.28 times more volatile than Intel. It trades about -0.04 of its total potential returns per unit of risk. Intel is currently generating about -0.01 per unit of volatility. If you would invest  2,027  in Intel on May 4, 2025 and sell it today you would lose (96.00) from holding Intel or give up 4.74% of portfolio value over 90 days.

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

Lumen Technologies  vs.  Intel

Lumen Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lumen Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Intel

Risk-Adjusted Performance

Very 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.

Pair Trading with Lumen Technologies and Intel

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

The idea behind Lumen Technologies and Intel 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.