Correlation Between Archer Materials and Intchains Group

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

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

Diversification Opportunities for Archer Materials and Intchains Group

-0.17

Correlation Coefficient

Archer Materials  Intchains Group

Good diversification

The 3 months correlation between Archer and Intchains is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Archer Materials Limited and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Archer Materials 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 Archer Materials Limited 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 Archer Materials i.e., Archer Materials and Intchains Group go up and down completely randomly.

Pair Corralation between Archer Materials and Intchains Group

Assuming the 90 days horizon Archer Materials Limited is expected to generate 0.71 times more return on investment than Intchains Group. However, Archer Materials Limited is 1.4 times less risky than Intchains Group. It trades about 0.15 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.05 per unit of risk. If you would invest  13.00  in Archer Materials Limited on September 22, 2024 and sell it today you would earn a total of  12.00  from holding Archer Materials Limited or generate 92.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.97%
Values	Daily Returns

Archer Materials Limited  vs.  Intchains Group Limited

Archer Materials

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Materials Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Archer Materials 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 Archer Materials and Intchains Group

The main advantage of trading using opposite Archer Materials and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archer Materials 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 Archer Materials Limited 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.