Correlation Between Icon Offshore and Binasat Communications
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and Binasat Communications 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 Icon Offshore and Binasat Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Offshore Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on Icon Offshore and Binasat Communications 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 Icon Offshore with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and Binasat Communications.
Diversification Opportunities for Icon Offshore and Binasat Communications
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Binasat is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Icon Offshore 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 Icon Offshore Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Icon Offshore i.e., Icon Offshore and Binasat Communications go up and down completely randomly.
Pair Corralation between Icon Offshore and Binasat Communications
Assuming the 90 days trading horizon Icon Offshore Bhd is expected to generate 0.81 times more return on investment than Binasat Communications. However, Icon Offshore Bhd is 1.23 times less risky than Binasat Communications. It trades about 0.03 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about 0.02 per unit of risk. If you would invest 105.00 in Icon Offshore Bhd on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Icon Offshore Bhd or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Icon Offshore Bhd vs. Binasat Communications Bhd
Performance |
| Timeline |
| Icon Offshore Bhd |
| Binasat Communications |
Icon Offshore and Binasat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and Binasat Communications
The main advantage of trading using opposite Icon Offshore and Binasat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, Binasat Communications 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 Binasat Communications will offset losses from the drop in Binasat Communications' long position.| Icon Offshore vs. Barakah Offshore Petroleum | Icon Offshore vs. Digistar Bhd | Icon Offshore vs. Minetech Resources Bhd | Icon Offshore vs. OpenSys M Bhd |
| Binasat Communications vs. Digistar Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. OpenSys M Bhd | Binasat Communications vs. Insas 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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