Correlation Between Bright Scholar and Intchains Group

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

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

Diversification Opportunities for Bright Scholar and Intchains Group

-0.19

Correlation Coefficient

Bright Scholar  Intchains Group

Good diversification

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

Pair Corralation between Bright Scholar and Intchains Group

Given the investment horizon of 90 days Bright Scholar Education is expected to generate 0.33 times more return on investment than Intchains Group. However, Bright Scholar Education is 3.04 times less risky than Intchains Group. It trades about 0.12 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  174.00  in Bright Scholar Education on October 27, 2024 and sell it today you would earn a total of  21.00  from holding Bright Scholar Education or generate 12.07% return on investment over 90 days.

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

Bright Scholar Education  vs.  Intchains Group Limited

Bright Scholar Education

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Scholar Education are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental indicators, Bright Scholar unveiled solid returns over the last few months and may actually be approaching a breakup point.

Intchains Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bright Scholar and Intchains Group

The main advantage of trading using opposite Bright Scholar and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar 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 Bright Scholar Education 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..