Correlation Between Odyssey Semiconductor and Intchains Group

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

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

Diversification Opportunities for Odyssey Semiconductor and Intchains Group

0.08

Correlation Coefficient

Odyssey Semiconductor  Intchains Group

Significant diversification

The 3 months correlation between Odyssey and Intchains is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Semiconductor Technolo and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Odyssey Semiconductor 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 Odyssey Semiconductor Technologies 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 Odyssey Semiconductor i.e., Odyssey Semiconductor and Intchains Group go up and down completely randomly.

Pair Corralation between Odyssey Semiconductor and Intchains Group

Given the investment horizon of 90 days Odyssey Semiconductor Technologies is expected to generate 2.64 times more return on investment than Intchains Group. However, Odyssey Semiconductor is 2.64 times more volatile than Intchains Group Limited. It trades about 0.04 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.03 per unit of risk. If you would invest  98.00  in Odyssey Semiconductor Technologies on September 22, 2024 and sell it today you would lose (91.50) from holding Odyssey Semiconductor Technologies or give up 93.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.56%
Values	Daily Returns

Odyssey Semiconductor Technolo  vs.  Intchains Group Limited

Odyssey Semiconductor

Risk-Adjusted Performance

12 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Odyssey Semiconductor Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward indicators, Odyssey Semiconductor demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Odyssey Semiconductor and Intchains Group

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

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.