Correlation Between Tex Cycle and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both Tex Cycle 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 Tex Cycle and Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tex Cycle Technology and Icon Offshore Bhd, you can compare the effects of market volatilities on Tex Cycle 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 Tex Cycle with a short position of Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tex Cycle and Icon Offshore.
Diversification Opportunities for Tex Cycle and Icon Offshore
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tex and Icon is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tex Cycle Technology 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 Tex Cycle 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 Tex Cycle Technology 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 Tex Cycle i.e., Tex Cycle and Icon Offshore go up and down completely randomly.
Pair Corralation between Tex Cycle and Icon Offshore
Assuming the 90 days trading horizon Tex Cycle is expected to generate 2.83 times less return on investment than Icon Offshore. But when comparing it to its historical volatility, Tex Cycle Technology is 1.01 times less risky than Icon Offshore. It trades about 0.04 of its potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 99.00 in Icon Offshore Bhd on November 28, 2024 and sell it today you would earn a total of 3.00 from holding Icon Offshore Bhd or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tex Cycle Technology vs. Icon Offshore Bhd
Performance |
| Timeline |
| Tex Cycle Technology |
| Icon Offshore Bhd |
Tex Cycle and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tex Cycle and Icon Offshore
The main advantage of trading using opposite Tex Cycle and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tex Cycle 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.| Tex Cycle vs. PMB Technology Bhd | Tex Cycle vs. Press Metal Bhd | Tex Cycle vs. Eonmetall Group Bhd | Tex Cycle vs. Sungei Bagan Rubber |
| Icon Offshore vs. Media Prima Bhd | Icon Offshore vs. Datasonic Group Bhd | Icon Offshore vs. Sports Toto Berhad | Icon Offshore vs. Lotte Chemical Titan |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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