Correlation Between Binasat Communications and Icon Offshore
Can any of the company-specific risk be diversified away by investing in both Binasat Communications 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 Binasat Communications and Icon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and Icon Offshore Bhd, you can compare the effects of market volatilities on Binasat Communications 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 Binasat Communications with a short position of Icon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Icon Offshore.
Diversification Opportunities for Binasat Communications and Icon Offshore
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Binasat and Icon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications 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 Binasat Communications 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 Binasat Communications 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 Binasat Communications i.e., Binasat Communications and Icon Offshore go up and down completely randomly.
Pair Corralation between Binasat Communications and Icon Offshore
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to generate 1.03 times more return on investment than Icon Offshore. However, Binasat Communications is 1.03 times more volatile than Icon Offshore Bhd. It trades about 0.16 of its potential returns per unit of risk. Icon Offshore Bhd is currently generating about -0.02 per unit of risk. If you would invest 20.00 in Binasat Communications Bhd on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Binasat Communications Bhd or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Icon Offshore Bhd
Performance |
| Timeline |
| Binasat Communications |
| Icon Offshore Bhd |
Binasat Communications and Icon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Icon Offshore
The main advantage of trading using opposite Binasat Communications and Icon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications 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.| Binasat Communications vs. Telekom Malaysia Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. Swift Haulage Bhd | Binasat Communications vs. Insas Bhd |
| Icon Offshore vs. Binasat Communications Bhd | Icon Offshore vs. BP Plastics Holding | Icon Offshore vs. Oriental Food Industries | Icon Offshore vs. Silver Ridge Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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