Correlation Between Intel Corp and Exxon

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

Diversification Opportunities for Intel Corp and Exxon

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Intel and Exxon is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Intel Corp i.e., Intel Corp and Exxon go up and down completely randomly.

Pair Corralation between Intel Corp and Exxon

Given the investment horizon of 90 days Intel Corp is expected to under-perform the Exxon. But the stock apears to be less risky and, when comparing its historical volatility, Intel Corp is 1.01 times less risky than Exxon. The stock trades about -0.09 of its potential returns per unit of risk. The Exxon Mobil Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  7,712  in Exxon Mobil Corp on May 17, 2022 and sell it today you would earn a total of  1,507  from holding Exxon Mobil Corp or generate 19.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Intel Corp  vs.  Exxon Mobil Corp

 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 September 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Intel Price Channel

Exxon Mobil Corp 
Exxon Performance
0 of 100
Over the last 90 days Exxon Mobil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Exxon is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Exxon Price Channel

Intel Corp and Exxon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel Corp and Exxon

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

Intel Corp

Pair trading matchups for Intel Corp

The idea behind Intel Corp and Exxon Mobil Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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