Correlation Between Arteris and Intchains Group

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

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

Diversification Opportunities for Arteris and Intchains Group

0.1

Correlation Coefficient

Arteris  Intchains Group

Average diversification

The 3 months correlation between Arteris and Intchains is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Arteris and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Arteris 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 Arteris are associated (or correlated) with Intchains Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intchains Group has no effect on the direction of Arteris i.e., Arteris and Intchains Group go up and down completely randomly.

Pair Corralation between Arteris and Intchains Group

Considering the 90-day investment horizon Arteris is expected to generate 0.71 times more return on investment than Intchains Group. However, Arteris is 1.42 times less risky than Intchains Group. It trades about 0.06 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.03 per unit of risk. If you would invest  419.00  in Arteris on September 22, 2024 and sell it today you would earn a total of  529.00  from holding Arteris or generate 126.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.92%
Values	Daily Returns

Arteris  vs.  Intchains Group Limited

Arteris

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arteris are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Arteris reported solid returns over the last few months and may actually be approaching a breakup point.

Intchains Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arteris and Intchains Group

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

The idea behind Arteris and Intchains Group Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.