Correlation Between LBG MEDIA and Intel

Can any of the company-specific risk be diversified away by investing in both LBG MEDIA and Intel 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 LBG MEDIA and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LBG MEDIA PLC and Intel, you can compare the effects of market volatilities on LBG MEDIA and Intel 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 LBG MEDIA with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of LBG MEDIA and Intel.

Diversification Opportunities for LBG MEDIA and Intel

0.31

Correlation Coefficient

LBG MEDIA  Intel

Weak diversification

The 3 months correlation between LBG and Intel is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding LBG MEDIA PLC and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and LBG MEDIA 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 LBG MEDIA PLC are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of LBG MEDIA i.e., LBG MEDIA and Intel go up and down completely randomly.

Pair Corralation between LBG MEDIA and Intel

Assuming the 90 days horizon LBG MEDIA is expected to generate 3.23 times less return on investment than Intel. In addition to that, LBG MEDIA is 1.13 times more volatile than Intel. It trades about 0.03 of its total potential returns per unit of risk. Intel is currently generating about 0.11 per unit of volatility. If you would invest  1,705  in Intel on April 19, 2025 and sell it today you would earn a total of  303.00  from holding Intel or generate 17.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

LBG MEDIA PLC  vs.  Intel

LBG MEDIA PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LBG MEDIA PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, LBG MEDIA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Intel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LBG MEDIA and Intel

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

The idea behind LBG MEDIA PLC and Intel 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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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 the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.