Correlation Between Applied Materials and Intchains Group
Can any of the company-specific risk be diversified away by investing in both Applied Materials 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 Applied Materials and Intchains Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials and Intchains Group Limited, you can compare the effects of market volatilities on Applied Materials 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 Applied Materials with a short position of Intchains Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials and Intchains Group.
Diversification Opportunities for Applied Materials and Intchains Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Applied and Intchains is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and Applied Materials 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 Applied Materials 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 Applied Materials i.e., Applied Materials and Intchains Group go up and down completely randomly.
Pair Corralation between Applied Materials and Intchains Group
Given the investment horizon of 90 days Applied Materials is expected to generate 0.48 times more return on investment than Intchains Group. However, Applied Materials is 2.06 times less risky than Intchains Group. It trades about 0.02 of its potential returns per unit of risk. Intchains Group Limited is currently generating about -0.04 per unit of risk. If you would invest 16,568 in Applied Materials on August 29, 2024 and sell it today you would earn a total of 752.00 from holding Applied Materials or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials vs. Intchains Group Limited
Performance |
| Timeline |
| Applied Materials |
| Intchains Group |
Applied Materials and Intchains Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials and Intchains Group
The main advantage of trading using opposite Applied Materials and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials 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.| Applied Materials vs. KLA Tencor | Applied Materials vs. ASML Holding NV | Applied Materials vs. Axcelis Technologies | Applied Materials vs. Teradyne |
| Intchains Group vs. ABIVAX Socit Anonyme | Intchains Group vs. Morningstar Unconstrained Allocation | Intchains Group vs. SPACE | Intchains Group vs. Knife River |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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