Correlation Between Icon Offshore and IHH Healthcare
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and IHH Healthcare 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 IHH Healthcare 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 IHH Healthcare Bhd, you can compare the effects of market volatilities on Icon Offshore and IHH Healthcare 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 IHH Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and IHH Healthcare.
Diversification Opportunities for Icon Offshore and IHH Healthcare
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and IHH is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and IHH Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHH Healthcare 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 IHH Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHH Healthcare Bhd has no effect on the direction of Icon Offshore i.e., Icon Offshore and IHH Healthcare go up and down completely randomly.
Pair Corralation between Icon Offshore and IHH Healthcare
Assuming the 90 days trading horizon Icon Offshore Bhd is expected to under-perform the IHH Healthcare. In addition to that, Icon Offshore is 1.28 times more volatile than IHH Healthcare Bhd. It trades about -0.16 of its total potential returns per unit of risk. IHH Healthcare Bhd is currently generating about -0.01 per unit of volatility. If you would invest 726.00 in IHH Healthcare Bhd on October 30, 2024 and sell it today you would lose (3.00) from holding IHH Healthcare Bhd or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Offshore Bhd vs. IHH Healthcare Bhd
Performance |
| Timeline |
| Icon Offshore Bhd |
| IHH Healthcare Bhd |
Icon Offshore and IHH Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and IHH Healthcare
The main advantage of trading using opposite Icon Offshore and IHH Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, IHH Healthcare 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 IHH Healthcare will offset losses from the drop in IHH Healthcare's long position.| Icon Offshore vs. Barakah Offshore Petroleum | Icon Offshore vs. Daya Materials Bhd | Icon Offshore vs. Minetech Resources Bhd | Icon Offshore vs. AirAsia X Bhd |
| IHH Healthcare vs. Homeritz Bhd | IHH Healthcare vs. Computer Forms Bhd | IHH Healthcare vs. Press Metal Bhd | IHH Healthcare vs. Sunzen Biotech 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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