Correlation Between Intchains Group and CEVA

Can any of the company-specific risk be diversified away by investing in both Intchains Group and CEVA 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 CEVA 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 CEVA Inc, you can compare the effects of market volatilities on Intchains Group and CEVA 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 CEVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intchains Group and CEVA.

Diversification Opportunities for Intchains Group and CEVA

0.49

Correlation Coefficient

Intchains Group  CEVA

Very weak diversification

The 3 months correlation between Intchains and CEVA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc 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 CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of Intchains Group i.e., Intchains Group and CEVA go up and down completely randomly.

Pair Corralation between Intchains Group and CEVA

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 14.34 times more return on investment than CEVA. However, Intchains Group is 14.34 times more volatile than CEVA Inc. It trades about 0.11 of its potential returns per unit of risk. CEVA Inc is currently generating about 0.13 per unit of risk. If you would invest  503.00  in Intchains Group Limited on October 9, 2024 and sell it today you would lose (68.00) from holding Intchains Group Limited or give up 13.52% of portfolio value over 90 days.

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

Intchains Group Limited  vs.  CEVA Inc

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.

CEVA Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CEVA Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CEVA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intchains Group and CEVA

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

The idea behind Intchains Group Limited and CEVA Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.