Correlation Between Intel Corp and FBR ASSET

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

Diversification Opportunities for Intel Corp and FBR ASSET

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Intel and FBR ASSET is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp and FBR ASSET INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FBR ASSET INVESTMENT 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 FBR ASSET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FBR ASSET INVESTMENT has no effect on the direction of Intel Corp i.e., Intel Corp and FBR ASSET go up and down completely randomly.

Pair Corralation between Intel Corp and FBR ASSET

Given the investment horizon of 90 days Intel Corp is expected to under-perform the FBR ASSET. But the stock apears to be less risky and, when comparing its historical volatility, Intel Corp is 1.82 times less risky than FBR ASSET. The stock trades about -0.19 of its potential returns per unit of risk. The FBR ASSET INVESTMENT is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  17,578  in FBR ASSET INVESTMENT on May 20, 2022 and sell it today you would lose (620.00)  from holding FBR ASSET INVESTMENT or give up 3.53% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy36.36%
ValuesDaily Returns

Intel Corp  vs.  FBR ASSET INVESTMENT

 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 weak 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

FBR ASSET INVESTMENT 
FBR ASSET Performance
0 of 100
Over the last 90 days FBR ASSET INVESTMENT 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 fundamental drivers 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 Corp and FBR ASSET Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel Corp and FBR ASSET

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

FBR ASSET INVESTMENT

Pair trading matchups for FBR ASSET

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 Global Correlations module to find global opportunities by holding instruments from different markets.

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