Correlation Between Intchains Group and AKITA Drilling

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

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

Diversification Opportunities for Intchains Group and AKITA Drilling

-0.57

Correlation Coefficient

Intchains Group  AKITA Drilling

Excellent diversification

The 3 months correlation between Intchains and AKITA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Intchains Group 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 Intchains Group Limited are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Intchains Group i.e., Intchains Group and AKITA Drilling go up and down completely randomly.

Pair Corralation between Intchains Group and AKITA Drilling

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 3.8 times more return on investment than AKITA Drilling. However, Intchains Group is 3.8 times more volatile than AKITA Drilling. It trades about 0.04 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.03 per unit of risk. If you would invest  808.00  in Intchains Group Limited on September 24, 2024 and sell it today you would earn a total of  69.00  from holding Intchains Group Limited or generate 8.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.4%
Values	Daily Returns

Intchains Group Limited  vs.  AKITA Drilling

Intchains Group

Risk-Adjusted Performance

2 of 100

Insignificant

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 inconsistent fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

AKITA Drilling

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AKITA Drilling is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Intchains Group and AKITA Drilling

The main advantage of trading using opposite Intchains Group and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intchains Group position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.

The idea behind Intchains Group Limited and AKITA Drilling 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.