Correlation Between Alphawave and Intchains Group

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

Diversification Opportunities for Alphawave and Intchains Group

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Alphawave and Intchains is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alphawave IP Group and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Alphawave 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 Alphawave IP Group 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 Alphawave i.e., Alphawave and Intchains Group go up and down completely randomly.

Pair Corralation between Alphawave and Intchains Group

Assuming the 90 days horizon Alphawave is expected to generate 1.92 times less return on investment than Intchains Group. But when comparing it to its historical volatility, Alphawave IP Group is 1.31 times less risky than Intchains Group. It trades about 0.02 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Intchains Group Limited on September 22, 2024 and sell it today you would earn a total of  77.00  from holding Intchains Group Limited or generate 9.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy89.74%
ValuesDaily Returns

Alphawave IP Group  vs.  Intchains Group Limited

 Performance 
       Timeline  
Alphawave IP Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak 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.
Intchains Group 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
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.

Alphawave and Intchains Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alphawave and Intchains Group

The main advantage of trading using opposite Alphawave and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphawave 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 Alphawave IP Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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