Correlation Between Canlan Ice and Intchains Group

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

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

Diversification Opportunities for Canlan Ice and Intchains Group

-0.14

Correlation Coefficient

Canlan Ice  Intchains Group

Good diversification

The 3 months correlation between Canlan and Intchains is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Intchains Group go up and down completely randomly.

Pair Corralation between Canlan Ice and Intchains Group

Assuming the 90 days horizon Canlan Ice is expected to generate 54.9 times less return on investment than Intchains Group. But when comparing it to its historical volatility, Canlan Ice Sports is 128.99 times less risky than Intchains Group. It trades about 0.22 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  525.00  in Intchains Group Limited on October 12, 2024 and sell it today you would lose (103.00) from holding Intchains Group Limited or give up 19.62% of portfolio value over 90 days.

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

Canlan Ice Sports  vs.  Intchains Group Limited

Canlan Ice Sports

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Intchains Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 5 (%) 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 Canlan Ice and Intchains Group

The main advantage of trading using opposite Canlan Ice and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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 Canlan Ice Sports 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.