Correlation Between Intchains Group and First Watch

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

Diversification Opportunities for Intchains Group and First Watch

-0.05

Correlation Coefficient

Intchains Group  First Watch

Good diversification

The 3 months correlation between Intchains and First is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and First Watch Restaurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Watch Restaurant 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 First Watch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Watch Restaurant has no effect on the direction of Intchains Group i.e., Intchains Group and First Watch go up and down completely randomly.

Pair Corralation between Intchains Group and First Watch

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 4.19 times more return on investment than First Watch. However, Intchains Group is 4.19 times more volatile than First Watch Restaurant. It trades about 0.0 of its potential returns per unit of risk. First Watch Restaurant is currently generating about -0.05 per unit of risk. If you would invest  718.00  in Intchains Group Limited on December 21, 2024 and sell it today you would lose (308.00) from holding Intchains Group Limited or give up 42.9% of portfolio value over 90 days.

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

Intchains Group Limited  vs.  First Watch Restaurant

Intchains Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intchains Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Intchains Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

First Watch Restaurant

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Watch Restaurant has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Intchains Group and First Watch

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

The idea behind Intchains Group Limited and First Watch Restaurant 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.