Correlation Between POET Technologies and Intchains Group
Can any of the company-specific risk be diversified away by investing in both POET Technologies 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 POET Technologies and Intchains Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POET Technologies and Intchains Group Limited, you can compare the effects of market volatilities on POET Technologies 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 POET Technologies with a short position of Intchains Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of POET Technologies and Intchains Group.
Diversification Opportunities for POET Technologies and Intchains Group
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POET and Intchains is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding POET Technologies and Intchains Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intchains Group and POET Technologies 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 POET 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 POET Technologies i.e., POET Technologies and Intchains Group go up and down completely randomly.
Pair Corralation between POET Technologies and Intchains Group
Given the investment horizon of 90 days POET Technologies is expected to generate 2.6 times more return on investment than Intchains Group. However, POET Technologies is 2.6 times more volatile than Intchains Group Limited. It trades about 0.34 of its potential returns per unit of risk. Intchains Group Limited is currently generating about 0.24 per unit of risk. If you would invest 360.00 in POET Technologies on September 3, 2024 and sell it today you would earn a total of 181.00 from holding POET Technologies or generate 50.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POET Technologies vs. Intchains Group Limited
Performance |
| Timeline |
| POET Technologies |
| Intchains Group |
POET Technologies and Intchains Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POET Technologies and Intchains Group
The main advantage of trading using opposite POET Technologies and Intchains Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POET Technologies 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.| POET Technologies vs. Pixelworks | POET Technologies vs. Valens | POET Technologies vs. CEVA Inc | POET Technologies vs. EMCORE |
| Intchains Group vs. Lucid Group | Intchains Group vs. Precision Drilling | Intchains Group vs. Seadrill Limited | Intchains Group vs. PACCAR Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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