Correlation Between Bats Series and Icon Information
Can any of the company-specific risk be diversified away by investing in both Bats Series and Icon Information 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 Bats Series and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bats Series M and Icon Information Technology, you can compare the effects of market volatilities on Bats Series and Icon Information 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 Bats Series with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bats Series and Icon Information.
Diversification Opportunities for Bats Series and Icon Information
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bats and Icon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bats Series M and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec and Bats Series 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 Bats Series M are associated (or correlated) with Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Bats Series i.e., Bats Series and Icon Information go up and down completely randomly.
Pair Corralation between Bats Series and Icon Information
Assuming the 90 days horizon Bats Series is expected to generate 2.56 times less return on investment than Icon Information. But when comparing it to its historical volatility, Bats Series M is 2.37 times less risky than Icon Information. It trades about 0.06 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,404 in Icon Information Technology on September 2, 2024 and sell it today you would earn a total of 218.00 from holding Icon Information Technology or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bats Series M vs. Icon Information Technology
Performance |
| Timeline |
| Bats Series M |
| Icon Information Tec |
Bats Series and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bats Series and Icon Information
The main advantage of trading using opposite Bats Series and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bats Series position performs unexpectedly, Icon Information 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 Information will offset losses from the drop in Icon Information's long position.| Bats Series vs. Blackrock California Municipal | Bats Series vs. Blackrock Balanced Capital | Bats Series vs. Blackrock Eurofund Class | Bats Series vs. Blackrock Funds |
| Icon Information vs. Icon Equity Income | Icon Information vs. Us Vector Equity | Icon Information vs. Balanced Fund Retail | Icon Information vs. Ms Global Fixed |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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