Correlation Between Intchains Group and Power Integrations

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

Diversification Opportunities for Intchains Group and Power Integrations

-0.44

Correlation Coefficient

Intchains Group  Power Integrations

Very good diversification

The 3 months correlation between Intchains and Power is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and Power Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Integrations 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 Power Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Integrations has no effect on the direction of Intchains Group i.e., Intchains Group and Power Integrations go up and down completely randomly.

Pair Corralation between Intchains Group and Power Integrations

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 2.18 times more return on investment than Power Integrations. However, Intchains Group is 2.18 times more volatile than Power Integrations. It trades about 0.0 of its potential returns per unit of risk. Power Integrations is currently generating about -0.01 per unit of risk. If you would invest  800.00  in Intchains Group Limited on August 23, 2024 and sell it today you would lose (368.00) from holding Intchains Group Limited or give up 46.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.89%
Values	Daily Returns

Intchains Group Limited  vs.  Power Integrations

Intchains Group

Risk-Adjusted Performance

0 of 100

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Power Integrations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Integrations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Intchains Group and Power Integrations

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

The idea behind Intchains Group Limited and Power Integrations 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..