Correlation Between Intel Corp and Abbvie

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Can any of the company-specific risk be diversified away by investing in both Intel Corp and Abbvie 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 Corp and Abbvie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel Corp and Abbvie Inc, you can compare the effects of market volatilities on Intel Corp and Abbvie 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 Corp with a short position of Abbvie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel Corp and Abbvie.

Diversification Opportunities for Intel Corp and Abbvie

  Correlation Coefficient

Significant diversification

The 3 months correlation between Intel and Abbvie is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp and Abbvie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbvie Inc and Intel Corp 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 Corp are associated (or correlated) with Abbvie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbvie Inc has no effect on the direction of Intel Corp i.e., Intel Corp and Abbvie go up and down completely randomly.

Pair Corralation between Intel Corp and Abbvie

Given the investment horizon of 90 days Intel Corp is expected to generate 2.0 times less return on investment than Abbvie. In addition to that, Intel Corp is 3.0 times more volatile than Abbvie Inc. It trades about 0.06 of its total potential returns per unit of risk. Abbvie Inc is currently generating about 0.39 per unit of volatility. If you would invest  14,640  in Abbvie Inc on September 1, 2022 and sell it today you would earn a total of  1,180  from holding Abbvie Inc or generate 8.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Intel Corp  vs.  Abbvie Inc

 Performance (%) 
Intel Corp 
Intel Performance
0 of 100
Over the last 90 days Intel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intel Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Intel Price Channel

Abbvie Inc 
Abbvie Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Abbvie Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental drivers, Abbvie showed solid returns over the last few months and may actually be approaching a breakup point.

Abbvie Price Channel

Intel Corp and Abbvie Volatility Contrast

   Predicted Return Density   

Pair Trading with Intel Corp and Abbvie

The main advantage of trading using opposite Intel Corp and Abbvie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel Corp position performs unexpectedly, Abbvie 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 Abbvie will offset losses from the drop in Abbvie's long position.
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The idea behind Intel Corp and Abbvie 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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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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