Correlation Between Icon Offshore and Central Industrial
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and Central Industrial 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 Central Industrial 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 Central Industrial Corp, you can compare the effects of market volatilities on Icon Offshore and Central Industrial 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 Central Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and Central Industrial.
Diversification Opportunities for Icon Offshore and Central Industrial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Icon and Central is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and Central Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industrial Corp 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 Central Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industrial Corp has no effect on the direction of Icon Offshore i.e., Icon Offshore and Central Industrial go up and down completely randomly.
Pair Corralation between Icon Offshore and Central Industrial
Assuming the 90 days trading horizon Icon Offshore is expected to generate 2.09 times less return on investment than Central Industrial. In addition to that, Icon Offshore is 4.08 times more volatile than Central Industrial Corp. It trades about 0.03 of its total potential returns per unit of risk. Central Industrial Corp is currently generating about 0.25 per unit of volatility. If you would invest 83.00 in Central Industrial Corp on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Central Industrial Corp or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Offshore Bhd vs. Central Industrial Corp
Performance |
| Timeline |
| Icon Offshore Bhd |
| Central Industrial Corp |
Icon Offshore and Central Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and Central Industrial
The main advantage of trading using opposite Icon Offshore and Central Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, Central Industrial 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 Central Industrial will offset losses from the drop in Central Industrial's 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 |
| Central Industrial vs. Supercomnet Technologies Bhd | Central Industrial vs. Aurelius Technologies Bhd | Central Industrial vs. PMB Technology Bhd | Central Industrial vs. Star Media Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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