Correlation Between Intel Corp and Advantest Corp

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

Diversification Opportunities for Intel Corp and Advantest Corp

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Intel and Advantest is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp and Advantest Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest Corp ADR 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 Advantest Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest Corp ADR has no effect on the direction of Intel Corp i.e., Intel Corp and Advantest Corp go up and down completely randomly.

Pair Corralation between Intel Corp and Advantest Corp

Given the investment horizon of 90 days Intel Corp is expected to generate 0.69 times more return on investment than Advantest Corp. However, Intel Corp is 1.44 times less risky than Advantest Corp. It trades about -0.44 of its potential returns per unit of risk. Advantest Corp ADR is currently generating about -0.41 per unit of risk. If you would invest  4,484  in Intel Corp on April 3, 2022 and sell it today you would lose (850.00)  from holding Intel Corp or give up 18.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Intel Corp  vs.  Advantest Corp ADR

 Performance (%) 
      Timeline 
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 conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.039
Payout Ratio
0.29
Last Split Factor
2:1
Forward Annual Dividend Rate
1.46
Dividend Date
2022-06-01
Ex Dividend Date
2022-05-05
Last Split Date
2000-07-31

Intel Price Channel

Advantest Corp ADR 
Advantest Performance
0 of 100
Over the last 90 days Advantest Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0179
Payout Ratio
0.12
Last Split Factor
1:2
Forward Annual Dividend Rate
0.98
Dividend Date
2017-12-08
Ex Dividend Date
2022-03-29
Last Split Date
2006-10-02

Advantest Price Channel

Intel Corp and Advantest Corp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Intel Corp and Advantest Corp

The main advantage of trading using opposite Intel Corp and Advantest Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel Corp position performs unexpectedly, Advantest Corp 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 Advantest Corp will offset losses from the drop in Advantest Corp's long position.
The idea behind Intel Corp and Advantest Corp ADR 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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