Correlation Between Aqua Power and Icon Media
Can any of the company-specific risk be diversified away by investing in both Aqua Power 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 Aqua Power and Icon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqua Power Systems and Icon Media Holdings, you can compare the effects of market volatilities on Aqua Power 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 Aqua Power with a short position of Icon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Power and Icon Media.
Diversification Opportunities for Aqua Power and Icon Media
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aqua and Icon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Power Systems 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 Aqua Power 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 Aqua Power Systems 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 Aqua Power i.e., Aqua Power and Icon Media go up and down completely randomly.
Pair Corralation between Aqua Power and Icon Media
Given the investment horizon of 90 days Aqua Power is expected to generate 3.14 times less return on investment than Icon Media. But when comparing it to its historical volatility, Aqua Power Systems is 4.82 times less risky than Icon Media. It trades about 0.3 of its potential returns per unit of risk. Icon Media Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Icon Media Holdings on November 2, 2024 and sell it today you would earn a total of 0.01 from holding Icon Media Holdings or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aqua Power Systems vs. Icon Media Holdings
Performance |
| Timeline |
| Aqua Power Systems |
| Icon Media Holdings |
Aqua Power and Icon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqua Power and Icon Media
The main advantage of trading using opposite Aqua Power and Icon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Power 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.| Aqua Power vs. Supurva Healthcare Group | Aqua Power vs. China Health Management | Aqua Power vs. Embrace Change Acquisition | Aqua Power vs. TransAKT |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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