Correlation Between Intel and Diamond Hill

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

Diversification Opportunities for Intel and Diamond Hill

  Correlation Coefficient

Very weak diversification

The 3 months correlation between Intel and Diamond is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Diamond Hill Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Investment 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 Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Investment has no effect on the direction of Intel i.e., Intel and Diamond Hill go up and down completely randomly.

Pair Corralation between Intel and Diamond Hill

Given the investment horizon of 90 days Intel is expected to under-perform the Diamond Hill. In addition to that, Intel is 1.26 times more volatile than Diamond Hill Investment. It trades about -0.03 of its total potential returns per unit of risk. Diamond Hill Investment is currently generating about 0.05 per unit of volatility. If you would invest  12,238  in Diamond Hill Investment on September 2, 2022 and sell it today you would earn a total of  5,635  from holding Diamond Hill Investment or generate 46.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Intel  vs.  Diamond Hill Investment

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

Intel Price Channel

Diamond Hill Investment 
Diamond Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Diamond Hill Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward indicators, Diamond Hill may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Diamond Price Channel

Intel and Diamond Hill Volatility Contrast

   Predicted Return Density   

Pair Trading with Intel and Diamond Hill

The main advantage of trading using opposite Intel and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.
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The idea behind Intel and Diamond Hill Investment 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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