Correlation Between Digistar Bhd and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and Icon Offshore 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 Digistar Bhd and Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and Icon Offshore Bhd, you can compare the effects of market volatilities on Digistar Bhd and Icon Offshore 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 Digistar Bhd with a short position of Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and Icon Offshore.
Diversification Opportunities for Digistar Bhd and Icon Offshore
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digistar and Icon is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Icon Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Offshore Bhd and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with Icon Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Offshore Bhd has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Icon Offshore go up and down completely randomly.
Pair Corralation between Digistar Bhd and Icon Offshore
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 11.0 times less return on investment than Icon Offshore. In addition to that, Digistar Bhd is 1.23 times more volatile than Icon Offshore Bhd. It trades about 0.01 of its total potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.07 per unit of volatility. If you would invest 39.00 in Icon Offshore Bhd on August 27, 2024 and sell it today you would earn a total of 66.00 from holding Icon Offshore Bhd or generate 169.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digistar Bhd vs. Icon Offshore Bhd
Performance |
| Timeline |
| Digistar Bhd |
| Icon Offshore Bhd |
Digistar Bhd and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and Icon Offshore
The main advantage of trading using opposite Digistar Bhd and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, Icon Offshore 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 Icon Offshore will offset losses from the drop in Icon Offshore's long position.| Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Duopharma Biotech Bhd | Digistar Bhd vs. Magni Tech Industries | Digistar Bhd vs. Apollo Food Holdings |
| Icon Offshore vs. Malaysia Steel Works | Icon Offshore vs. British American Tobacco | Icon Offshore vs. PMB Technology Bhd | Icon Offshore vs. Coraza Integrated Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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