Correlation Between ICON PLC and Star Equity

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Can any of the company-specific risk be diversified away by investing in both ICON PLC and Star Equity 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 PLC and Star Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON PLC and Star Equity Holdings, you can compare the effects of market volatilities on ICON PLC and Star Equity 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 PLC with a short position of Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON PLC and Star Equity.

Diversification Opportunities for ICON PLC and Star Equity

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between ICON and Star is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ICON PLC and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings and ICON PLC 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 PLC are associated (or correlated) with Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of ICON PLC i.e., ICON PLC and Star Equity go up and down completely randomly.

Pair Corralation between ICON PLC and Star Equity

Given the investment horizon of 90 days ICON PLC is expected to under-perform the Star Equity. In addition to that, ICON PLC is 1.38 times more volatile than Star Equity Holdings. It trades about -0.32 of its total potential returns per unit of risk. Star Equity Holdings is currently generating about 0.26 per unit of volatility. If you would invest  905.00  in Star Equity Holdings on January 7, 2025 and sell it today you would earn a total of  89.00  from holding Star Equity Holdings or generate 9.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ICON PLC  vs.  Star Equity Holdings

 Performance 
       Timeline  
ICON PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ICON PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
Star Equity Holdings 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Star Equity Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Star Equity is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ICON PLC and Star Equity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ICON PLC and Star Equity

The main advantage of trading using opposite ICON PLC and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON PLC position performs unexpectedly, Star Equity 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 Star Equity will offset losses from the drop in Star Equity's long position.
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The idea behind ICON PLC and Star Equity Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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