Correlation Between NVE and Intchains Group
Can any of the company-specific risk be diversified away by investing in both NVE 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 NVE and Intchains Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVE Corporation and Intchains Group Limited, you can compare the effects of market volatilities on NVE 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 NVE with a short position of Intchains Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVE and Intchains Group.
Diversification Opportunities for NVE and Intchains Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between NVE and Intchains is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NVE Corp. and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and NVE 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 NVE Corporation 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 NVE i.e., NVE and Intchains Group go up and down completely randomly.
Pair Corralation between NVE and Intchains Group
Given the investment horizon of 90 days NVE Corporation is expected to generate 0.38 times more return on investment than Intchains Group. However, NVE Corporation is 2.64 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 -0.05 per unit of risk. If you would invest 7,561 in NVE Corporation on August 29, 2024 and sell it today you would earn a total of 123.00 from holding NVE Corporation or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVE Corp. vs. Intchains Group Limited
Performance |
| Timeline |
| NVE Corporation |
| Intchains Group |
NVE and Intchains Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVE and Intchains Group
The main advantage of trading using opposite NVE and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVE 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 NVE Corporation 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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