Correlation Between Icon Offshore and Leader Steel
Can any of the company-specific risk be diversified away by investing in both Icon Offshore and Leader Steel 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 Leader Steel 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 Leader Steel Holdings, you can compare the effects of market volatilities on Icon Offshore and Leader Steel 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 Leader Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and Leader Steel.
Diversification Opportunities for Icon Offshore and Leader Steel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Leader is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and Leader Steel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leader Steel Holdings 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 Leader Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leader Steel Holdings has no effect on the direction of Icon Offshore i.e., Icon Offshore and Leader Steel go up and down completely randomly.
Pair Corralation between Icon Offshore and Leader Steel
Assuming the 90 days trading horizon Icon Offshore Bhd is expected to generate 1.13 times more return on investment than Leader Steel. However, Icon Offshore is 1.13 times more volatile than Leader Steel Holdings. It trades about 0.07 of its potential returns per unit of risk. Leader Steel Holdings is currently generating about 0.01 per unit of risk. If you would invest 41.00 in Icon Offshore Bhd on September 3, 2024 and sell it today you would earn a total of 66.00 from holding Icon Offshore Bhd or generate 160.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Offshore Bhd vs. Leader Steel Holdings
Performance |
| Timeline |
| Icon Offshore Bhd |
| Leader Steel Holdings |
Icon Offshore and Leader Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Offshore and Leader Steel
The main advantage of trading using opposite Icon Offshore and Leader Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Offshore position performs unexpectedly, Leader Steel 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 Leader Steel will offset losses from the drop in Leader Steel's long position.| Icon Offshore vs. Barakah Offshore Petroleum | Icon Offshore vs. Daya Materials Bhd | Icon Offshore vs. Minetech Resources Bhd | Icon Offshore vs. Swift Haulage Bhd |
| Leader Steel vs. Press Metal Bhd | Leader Steel vs. Pantech Group Holdings | Leader Steel vs. CSC Steel Holdings | Leader Steel vs. Malaysia Steel Works |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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