Correlation Between Icon Offshore and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and FARM FRESH 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 FARM FRESH 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 FARM FRESH BERHAD, you can compare the effects of market volatilities on Icon Offshore and FARM FRESH 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 FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and FARM FRESH.
Diversification Opportunities for Icon Offshore and FARM FRESH
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icon and FARM is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and FARM FRESH BERHAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM FRESH BERHAD 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 FARM FRESH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM FRESH BERHAD has no effect on the direction of Icon Offshore i.e., Icon Offshore and FARM FRESH go up and down completely randomly.
Pair Corralation between Icon Offshore and FARM FRESH
Assuming the 90 days trading horizon Icon Offshore Bhd is expected to generate 0.62 times more return on investment than FARM FRESH. However, Icon Offshore Bhd is 1.61 times less risky than FARM FRESH. It trades about 0.01 of its potential returns per unit of risk. FARM FRESH BERHAD is currently generating about -0.14 per unit of risk. If you would invest 100.00 in Icon Offshore Bhd on November 3, 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 | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Icon Offshore Bhd vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Icon Offshore Bhd |
| FARM FRESH BERHAD |
Icon Offshore and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and FARM FRESH
The main advantage of trading using opposite Icon Offshore and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, FARM FRESH 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 FARM FRESH will offset losses from the drop in FARM FRESH's long position.| Icon Offshore vs. Oriental Food Industries | Icon Offshore vs. Public Bank Bhd | Icon Offshore vs. Eonmetall Group Bhd | Icon Offshore vs. Petronas Chemicals Group |
| FARM FRESH vs. Press Metal Bhd | FARM FRESH vs. TAS Offshore Bhd | FARM FRESH vs. Aeon Credit Service | FARM FRESH vs. Bank Islam Malaysia |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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