Correlation Between Blue Moon and Intchains Group

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

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

Diversification Opportunities for Blue Moon and Intchains Group

-0.46

Correlation Coefficient

Blue Moon  Intchains Group

Very good diversification

The 3 months correlation between Blue and Intchains is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Blue Moon Metals and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Blue Moon 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 Blue Moon Metals 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 Blue Moon i.e., Blue Moon and Intchains Group go up and down completely randomly.

Pair Corralation between Blue Moon and Intchains Group

Assuming the 90 days horizon Blue Moon is expected to generate 58.27 times less return on investment than Intchains Group. But when comparing it to its historical volatility, Blue Moon Metals is 5.79 times less risky than Intchains Group. It trades about 0.01 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  422.00  in Intchains Group Limited on September 26, 2024 and sell it today you would earn a total of  246.00  from holding Intchains Group Limited or generate 58.29% return on investment over 90 days.

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

Blue Moon Metals  vs.  Intchains Group Limited

Blue Moon Metals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Moon Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blue Moon reported solid returns over the last few months and may actually be approaching a breakup point.

Intchains Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Moon and Intchains Group

The main advantage of trading using opposite Blue Moon and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Moon 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 Blue Moon Metals 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.