Correlation Between Intchains Group and Lumentum Holdings
Can any of the company-specific risk be diversified away by investing in both Intchains Group and Lumentum Holdings 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 Lumentum Holdings 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 Lumentum Holdings, you can compare the effects of market volatilities on Intchains Group and Lumentum Holdings 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 Lumentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intchains Group and Lumentum Holdings.
Diversification Opportunities for Intchains Group and Lumentum Holdings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intchains and Lumentum is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and Lumentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumentum Holdings 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 Lumentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumentum Holdings has no effect on the direction of Intchains Group i.e., Intchains Group and Lumentum Holdings go up and down completely randomly.
Pair Corralation between Intchains Group and Lumentum Holdings
Considering the 90-day investment horizon Intchains Group Limited is expected to under-perform the Lumentum Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Intchains Group Limited is 1.91 times less risky than Lumentum Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The Lumentum Holdings is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 6,566 in Lumentum Holdings on August 24, 2024 and sell it today you would earn a total of 1,995 from holding Lumentum Holdings or generate 30.38% 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. Lumentum Holdings
Performance |
| Timeline |
| Intchains Group |
| Lumentum Holdings |
Intchains Group and Lumentum Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intchains Group and Lumentum Holdings
The main advantage of trading using opposite Intchains Group and Lumentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intchains Group position performs unexpectedly, Lumentum Holdings 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 Lumentum Holdings will offset losses from the drop in Lumentum Holdings' long position.| Intchains Group vs. Eshallgo Class A | Intchains Group vs. Amtech Systems | Intchains Group vs. Gold Fields Ltd | Intchains Group vs. Aegean Airlines SA |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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