Correlation Between Intchains Group and Trio Tech

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

Diversification Opportunities for Intchains Group and Trio Tech

-0.6

Correlation Coefficient

Intchains Group  Trio Tech

Excellent diversification

The 3 months correlation between Intchains and Trio is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of Intchains Group i.e., Intchains Group and Trio Tech go up and down completely randomly.

Pair Corralation between Intchains Group and Trio Tech

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 9.63 times more return on investment than Trio Tech. However, Intchains Group is 9.63 times more volatile than Trio Tech International. It trades about 0.24 of its potential returns per unit of risk. Trio Tech International is currently generating about -0.23 per unit of risk. If you would invest  428.00  in Intchains Group Limited on September 23, 2024 and sell it today you would earn a total of  449.00  from holding Intchains Group Limited or generate 104.91% return on investment over 90 days.

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

Intchains Group Limited  vs.  Trio Tech International

Intchains Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intchains Group Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Intchains Group reported solid returns over the last few months and may actually be approaching a breakup point.

Trio Tech International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trio Tech International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Trio Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intchains Group and Trio Tech

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

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