Correlation Between HE Equipment and Icon Energy
Can any of the company-specific risk be diversified away by investing in both HE Equipment and Icon Energy 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 HE Equipment and Icon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Icon Energy Corp, you can compare the effects of market volatilities on HE Equipment and Icon Energy 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 HE Equipment with a short position of Icon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Icon Energy.
Diversification Opportunities for HE Equipment and Icon Energy
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEES and Icon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Icon Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Energy Corp and HE Equipment 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 HE Equipment Services are associated (or correlated) with Icon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Energy Corp has no effect on the direction of HE Equipment i.e., HE Equipment and Icon Energy go up and down completely randomly.
Pair Corralation between HE Equipment and Icon Energy
Given the investment horizon of 90 days HE Equipment Services is expected to generate 0.51 times more return on investment than Icon Energy. However, HE Equipment Services is 1.98 times less risky than Icon Energy. It trades about 0.03 of its potential returns per unit of risk. Icon Energy Corp is currently generating about -0.04 per unit of risk. If you would invest 5,145 in HE Equipment Services on September 14, 2024 and sell it today you would earn a total of 421.00 from holding HE Equipment Services or generate 8.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.37% |
| Values | Daily Returns |
HE Equipment Services vs. Icon Energy Corp
Performance |
| Timeline |
| HE Equipment Services |
| Icon Energy Corp |
HE Equipment and Icon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Icon Energy
The main advantage of trading using opposite HE Equipment and Icon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, Icon Energy 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 Energy will offset losses from the drop in Icon Energy's long position.| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Custom Truck One | HE Equipment vs. Herc Holdings | HE Equipment vs. Alta Equipment Group |
| Icon Energy vs. Western Acquisition Ventures | Icon Energy vs. Inflection Point Acquisition | Icon Energy vs. Boyd Gaming | Icon Energy vs. Papaya Growth Opportunity |
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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