Correlation Between Sunzen Biotech and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both Sunzen Biotech 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 Sunzen Biotech and Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunzen Biotech Bhd and Icon Offshore Bhd, you can compare the effects of market volatilities on Sunzen Biotech 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 Sunzen Biotech with a short position of Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunzen Biotech and Icon Offshore.
Diversification Opportunities for Sunzen Biotech and Icon Offshore
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunzen and Icon is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sunzen Biotech 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 Sunzen Biotech 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 Sunzen Biotech 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 Sunzen Biotech i.e., Sunzen Biotech and Icon Offshore go up and down completely randomly.
Pair Corralation between Sunzen Biotech and Icon Offshore
Assuming the 90 days trading horizon Sunzen Biotech is expected to generate 4.68 times less return on investment than Icon Offshore. But when comparing it to its historical volatility, Sunzen Biotech Bhd is 1.94 times less risky than Icon Offshore. It trades about 0.03 of its potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Icon Offshore Bhd on August 27, 2024 and sell it today you would earn a total of 30.00 from holding Icon Offshore Bhd or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunzen Biotech Bhd vs. Icon Offshore Bhd
Performance |
| Timeline |
| Sunzen Biotech Bhd |
| Icon Offshore Bhd |
Sunzen Biotech and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunzen Biotech and Icon Offshore
The main advantage of trading using opposite Sunzen Biotech and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunzen Biotech 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.The idea behind Sunzen Biotech Bhd and Icon Offshore Bhd 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.| Icon Offshore vs. Barakah Offshore Petroleum | Icon Offshore vs. Digistar Bhd | Icon Offshore vs. Minetech Resources Bhd | Icon Offshore vs. OpenSys M Bhd |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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