Correlation Between Icon Offshore and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on Icon Offshore and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and Computer Forms.
Diversification Opportunities for Icon Offshore and Computer Forms
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Computer is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Icon Offshore i.e., Icon Offshore and Computer Forms go up and down completely randomly.
Pair Corralation between Icon Offshore and Computer Forms
Assuming the 90 days trading horizon Icon Offshore is expected to generate 2.69 times less return on investment than Computer Forms. But when comparing it to its historical volatility, Icon Offshore Bhd is 7.6 times less risky than Computer Forms. It trades about 0.12 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Computer Forms Bhd on November 28, 2024 and sell it today you would earn a total of 0.00 from holding Computer Forms Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Offshore Bhd vs. Computer Forms Bhd
Performance |
| Timeline |
| Icon Offshore Bhd |
| Computer Forms Bhd |
Icon Offshore and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and Computer Forms
The main advantage of trading using opposite Icon Offshore and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.| Icon Offshore vs. Media Prima Bhd | Icon Offshore vs. Datasonic Group Bhd | Icon Offshore vs. Sports Toto Berhad | Icon Offshore vs. Lotte Chemical Titan |
| Computer Forms vs. Mercury Industries Bhd | Computer Forms vs. Awanbiru Technology Bhd | Computer Forms vs. IHH Healthcare Bhd | Computer Forms vs. CB Industrial Product |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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