Correlation Between MClean Technologies and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both MClean Technologies 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 MClean Technologies and Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MClean Technologies Bhd and Icon Offshore Bhd, you can compare the effects of market volatilities on MClean Technologies 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 MClean Technologies with a short position of Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of MClean Technologies and Icon Offshore.
Diversification Opportunities for MClean Technologies and Icon Offshore
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MClean and Icon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding MClean Technologies 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 MClean 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 MClean Technologies 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 MClean Technologies i.e., MClean Technologies and Icon Offshore go up and down completely randomly.
Pair Corralation between MClean Technologies and Icon Offshore
Assuming the 90 days trading horizon MClean Technologies Bhd is expected to under-perform the Icon Offshore. In addition to that, MClean Technologies is 1.21 times more volatile than Icon Offshore Bhd. It trades about -0.18 of its total potential returns per unit of risk. Icon Offshore Bhd is currently generating about 0.01 per unit of volatility. If you would invest 105.00 in Icon Offshore Bhd on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Icon Offshore Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
MClean Technologies Bhd vs. Icon Offshore Bhd
Performance |
| Timeline |
| MClean Technologies Bhd |
| Icon Offshore Bhd |
MClean Technologies and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MClean Technologies and Icon Offshore
The main advantage of trading using opposite MClean Technologies and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MClean Technologies 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.| MClean Technologies vs. Silver Ridge Holdings | MClean Technologies vs. Star Media Group | MClean Technologies vs. Choo Bee Metal | MClean Technologies vs. Homeritz Bhd |
| Icon Offshore vs. Sports Toto Berhad | Icon Offshore vs. Alliance Financial Group | Icon Offshore vs. MClean Technologies Bhd | Icon Offshore vs. Cengild Medical Berhad |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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