Correlation Between HP and Intchains Group

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

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

Diversification Opportunities for HP and Intchains Group

0.33

Correlation Coefficient

HP  Intchains Group

Weak diversification

The 3 months correlation between HP and Intchains is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and HP 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 HP Inc 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 HP i.e., HP and Intchains Group go up and down completely randomly.

Pair Corralation between HP and Intchains Group

Considering the 90-day investment horizon HP Inc is expected to generate 0.13 times more return on investment than Intchains Group. However, HP Inc is 7.81 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 -0.04 per unit of risk. If you would invest  3,261  in HP Inc on December 20, 2024 and sell it today you would lose (385.00) from holding HP Inc or give up 11.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

HP Inc  vs.  Intchains Group Limited

HP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Intchains Group

Risk-Adjusted Performance

Insignificant

Over the last 90 days Intchains Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HP and Intchains Group

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