Correlation Between Icon Media and Intl Star
Can any of the company-specific risk be diversified away by investing in both Icon Media and Intl Star 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 Intl Star 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 Intl Star, you can compare the effects of market volatilities on Icon Media and Intl Star 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 Intl Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Media and Intl Star.
Diversification Opportunities for Icon Media and Intl Star
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icon and Intl is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Icon Media Holdings and Intl Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intl Star 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 Intl Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intl Star has no effect on the direction of Icon Media i.e., Icon Media and Intl Star go up and down completely randomly.
Pair Corralation between Icon Media and Intl Star
Given the investment horizon of 90 days Icon Media Holdings is expected to generate 1.34 times more return on investment than Intl Star. However, Icon Media is 1.34 times more volatile than Intl Star. It trades about 0.04 of its potential returns per unit of risk. Intl Star is currently generating about -0.09 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Media Holdings vs. Intl Star
Performance |
| Timeline |
| Icon Media Holdings |
| Intl Star |
Icon Media and Intl Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Media and Intl Star
The main advantage of trading using opposite Icon Media and Intl Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Media position performs unexpectedly, Intl Star 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 Intl Star will offset losses from the drop in Intl Star'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 |
| Intl Star vs. TransAKT | Intl Star vs. China Health Management | Intl Star vs. Huaizhong Health Group | Intl Star vs. Trimax Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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