Correlation Between Icon Natural and VivoPower International
Can any of the company-specific risk be diversified away by investing in both Icon Natural and VivoPower International 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 Natural and VivoPower International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Natural Resources and VivoPower International PLC, you can compare the effects of market volatilities on Icon Natural and VivoPower International 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 Natural with a short position of VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and VivoPower International.
Diversification Opportunities for Icon Natural and VivoPower International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Icon and VivoPower is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and Icon Natural 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 Natural Resources are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Icon Natural i.e., Icon Natural and VivoPower International go up and down completely randomly.
Pair Corralation between Icon Natural and VivoPower International
Assuming the 90 days horizon Icon Natural is expected to generate 6.03 times less return on investment than VivoPower International. But when comparing it to its historical volatility, Icon Natural Resources is 13.03 times less risky than VivoPower International. It trades about 0.3 of its potential returns per unit of risk. VivoPower International PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 84.00 in VivoPower International PLC on August 27, 2024 and sell it today you would earn a total of 23.00 from holding VivoPower International PLC or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. VivoPower International PLC
Performance |
| Timeline |
| Icon Natural Resources |
| VivoPower International |
Icon Natural and VivoPower International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and VivoPower International
The main advantage of trading using opposite Icon Natural and VivoPower International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, VivoPower International 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 VivoPower International will offset losses from the drop in VivoPower International's long position.| Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Icon Information Technology |
| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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