Correlation Between Icon Media and All American
Can any of the company-specific risk be diversified away by investing in both Icon Media and All American 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 Media and All American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Media Holdings and All American Gld, you can compare the effects of market volatilities on Icon Media and All American 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 Media with a short position of All American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Media and All American.
Diversification Opportunities for Icon Media and All American
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and All is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Icon Media Holdings and All American Gld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Gld and Icon Media 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 Media Holdings are associated (or correlated) with All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Gld has no effect on the direction of Icon Media i.e., Icon Media and All American go up and down completely randomly.
Pair Corralation between Icon Media and All American
Given the investment horizon of 90 days Icon Media Holdings is expected to generate 1.9 times more return on investment than All American. However, Icon Media is 1.9 times more volatile than All American Gld. It trades about 0.04 of its potential returns per unit of risk. All American Gld is currently generating about 0.04 per unit of risk. If you would invest 0.04 in Icon Media Holdings on August 29, 2024 and sell it today you would lose (0.01) from holding Icon Media Holdings or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Media Holdings vs. All American Gld
Performance |
| Timeline |
| Icon Media Holdings |
| All American Gld |
Icon Media and All American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Media and All American
The main advantage of trading using opposite Icon Media and All American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Media position performs unexpectedly, All American 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 All American will offset losses from the drop in All American's long position.| Icon Media vs. Eline Entertainment Group | Icon Media vs. Green Leaf Innovations | Icon Media vs. Plandai Biotech | Icon Media vs. All American Gld |
| All American vs. Rimrock Gold Corp | All American vs. V Group | All American vs. Indo Global Exchange | All American vs. KYN Capital Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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