Correlation Between American Leisure and Icon Media
Can any of the company-specific risk be diversified away by investing in both American Leisure and Icon Media 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 American Leisure and Icon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Leisure Holdings and Icon Media Holdings, you can compare the effects of market volatilities on American Leisure and Icon Media 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 American Leisure with a short position of Icon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Leisure and Icon Media.
Diversification Opportunities for American Leisure and Icon Media
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Icon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding American Leisure Holdings and Icon Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Media Holdings and American Leisure 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 American Leisure Holdings are associated (or correlated) with Icon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Media Holdings has no effect on the direction of American Leisure i.e., American Leisure and Icon Media go up and down completely randomly.
Pair Corralation between American Leisure and Icon Media
Given the investment horizon of 90 days American Leisure Holdings is expected to generate 2.11 times more return on investment than Icon Media. However, American Leisure is 2.11 times more volatile than Icon Media Holdings. It trades about 0.16 of its potential returns per unit of risk. Icon Media Holdings is currently generating about 0.08 per unit of risk. If you would invest 0.02 in American Leisure Holdings on November 27, 2024 and sell it today you would lose (0.01) from holding American Leisure Holdings or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Leisure Holdings vs. Icon Media Holdings
Performance |
| Timeline |
| American Leisure Holdings |
| Icon Media Holdings |
American Leisure and Icon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Leisure and Icon Media
The main advantage of trading using opposite American Leisure and Icon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Leisure position performs unexpectedly, Icon Media 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 Icon Media will offset losses from the drop in Icon Media's long position.| American Leisure vs. Absolute Health and | American Leisure vs. Supurva Healthcare Group | American Leisure vs. Alpha Wastewater | American Leisure vs. CTR Investments Consulting |
| Icon Media vs. Eline Entertainment Group | Icon Media vs. Green Leaf Innovations | Icon Media vs. Plandai Biotech | Icon Media vs. All American Gld |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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