Correlation Between Icon Offshore and FGV Holdings
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and FGV Holdings 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 FGV Holdings 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 FGV Holdings Bhd, you can compare the effects of market volatilities on Icon Offshore and FGV Holdings 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 FGV Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and FGV Holdings.
Diversification Opportunities for Icon Offshore and FGV Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and FGV is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and FGV Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FGV Holdings Bhd 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 FGV Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FGV Holdings Bhd has no effect on the direction of Icon Offshore i.e., Icon Offshore and FGV Holdings go up and down completely randomly.
Pair Corralation between Icon Offshore and FGV Holdings
Assuming the 90 days trading horizon Icon Offshore Bhd is expected to under-perform the FGV Holdings. In addition to that, Icon Offshore is 1.18 times more volatile than FGV Holdings Bhd. It trades about -0.08 of its total potential returns per unit of risk. FGV Holdings Bhd is currently generating about 0.0 per unit of volatility. If you would invest 119.00 in FGV Holdings Bhd on December 4, 2024 and sell it today you would lose (3.00) from holding FGV Holdings Bhd or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Offshore Bhd vs. FGV Holdings Bhd
Performance |
| Timeline |
| Icon Offshore Bhd |
| FGV Holdings Bhd |
Icon Offshore and FGV Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and FGV Holdings
The main advantage of trading using opposite Icon Offshore and FGV Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, FGV Holdings 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 FGV Holdings will offset losses from the drop in FGV Holdings' long position.| Icon Offshore vs. Awanbiru Technology Bhd | Icon Offshore vs. Privasia Technology Bhd | Icon Offshore vs. Uchi Technologies Bhd | Icon Offshore vs. Radiant Globaltech Bhd |
| FGV Holdings vs. BP Plastics Holding | FGV Holdings vs. Bank Islam Malaysia | FGV Holdings vs. KPJ Healthcare Bhd | FGV Holdings vs. Public Bank 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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