Correlation Between Intchains Group and Ascent Solar

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

Diversification Opportunities for Intchains Group and Ascent Solar

0.7

Correlation Coefficient

Intchains Group  Ascent Solar

Poor diversification

The 3 months correlation between Intchains and Ascent is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Intchains Group Limited and Ascent Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technologies 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 Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technologies has no effect on the direction of Intchains Group i.e., Intchains Group and Ascent Solar go up and down completely randomly.

Pair Corralation between Intchains Group and Ascent Solar

Considering the 90-day investment horizon Intchains Group Limited is expected to generate 0.29 times more return on investment than Ascent Solar. However, Intchains Group Limited is 3.49 times less risky than Ascent Solar. It trades about -0.06 of its potential returns per unit of risk. Ascent Solar Technologies is currently generating about -0.06 per unit of risk. If you would invest  1,025  in Intchains Group Limited on February 26, 2024 and sell it today you would lose (207.00) from holding Intchains Group Limited or give up 20.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Intchains Group Limited  vs.  Ascent Solar Technologies

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 unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ascent Solar Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascent Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Intchains Group and Ascent Solar

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

The idea behind Intchains Group Limited and Ascent Solar Technologies 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.