Correlation Between Intchains Group and Alphawave

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

By analyzing existing cross correlation between Intchains Group Limited and Alphawave IP Group, you can compare the effects of market volatilities on Intchains Group and Alphawave 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 Intchains Group with a short position of Alphawave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intchains Group and Alphawave.

Diversification Opportunities for Intchains Group and Alphawave

-0.24

Correlation Coefficient

Intchains Group  Alphawave

Very good diversification

The 3 months correlation between Intchains and Alphawave is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and Alphawave IP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphawave IP Group and Intchains Group 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 Intchains Group Limited are associated (or correlated) with Alphawave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphawave IP Group has no effect on the direction of Intchains Group i.e., Intchains Group and Alphawave go up and down completely randomly.

Pair Corralation between Intchains Group and Alphawave

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 2.39 times more return on investment than Alphawave. However, Intchains Group is 2.39 times more volatile than Alphawave IP Group. It trades about 0.13 of its potential returns per unit of risk. Alphawave IP Group is currently generating about -0.03 per unit of risk. If you would invest  447.00  in Intchains Group Limited on September 30, 2024 and sell it today you would earn a total of  486.00  from holding Intchains Group Limited or generate 108.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intchains Group Limited  vs.  Alphawave IP Group

Intchains Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

Alphawave IP Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alphawave IP Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Intchains Group and Alphawave

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

The idea behind Intchains Group Limited and Alphawave IP Group 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 the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.