Correlation Between Intel Corp and Etsy

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

Diversification Opportunities for Intel Corp and Etsy

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Intel and Etsy is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy 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 Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Intel Corp i.e., Intel Corp and Etsy go up and down completely randomly.

Pair Corralation between Intel Corp and Etsy

Given the investment horizon of 90 days Intel Corp is expected to under-perform the Etsy. But the stock apears to be less risky and, when comparing its historical volatility, Intel Corp is 2.18 times less risky than Etsy. The stock trades about -0.06 of its potential returns per unit of risk. The Etsy Inc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  19,208  in Etsy Inc on May 10, 2022 and sell it today you would lose (8,010)  from holding Etsy Inc or give up 41.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Intel Corp  vs.  Etsy Inc

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

Intel Price Channel

Etsy Inc 
Etsy Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Etsy showed solid returns over the last few months and may actually be approaching a breakup point.

Etsy Price Channel

Intel Corp and Etsy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel Corp and Etsy

The main advantage of trading using opposite Intel Corp and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel Corp position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy's long position.
The idea behind Intel Corp and Etsy 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.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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