Correlation Between ICON PROPERTIES and MALAWI PROPERTY
Can any of the company-specific risk be diversified away by investing in both ICON PROPERTIES and MALAWI PROPERTY 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 PROPERTIES and MALAWI PROPERTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON PROPERTIES LIMITED and MALAWI PROPERTY INVESTMENT, you can compare the effects of market volatilities on ICON PROPERTIES and MALAWI PROPERTY 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 PROPERTIES with a short position of MALAWI PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON PROPERTIES and MALAWI PROPERTY.
Diversification Opportunities for ICON PROPERTIES and MALAWI PROPERTY
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ICON and MALAWI is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ICON PROPERTIES LIMITED and MALAWI PROPERTY INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MALAWI PROPERTY INVE and ICON PROPERTIES 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 PROPERTIES LIMITED are associated (or correlated) with MALAWI PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MALAWI PROPERTY INVE has no effect on the direction of ICON PROPERTIES i.e., ICON PROPERTIES and MALAWI PROPERTY go up and down completely randomly.
Pair Corralation between ICON PROPERTIES and MALAWI PROPERTY
Assuming the 90 days trading horizon ICON PROPERTIES LIMITED is expected to generate 1.21 times more return on investment than MALAWI PROPERTY. However, ICON PROPERTIES is 1.21 times more volatile than MALAWI PROPERTY INVESTMENT. It trades about 0.06 of its potential returns per unit of risk. MALAWI PROPERTY INVESTMENT is currently generating about -0.01 per unit of risk. If you would invest 1,192 in ICON PROPERTIES LIMITED on November 2, 2024 and sell it today you would earn a total of 612.00 from holding ICON PROPERTIES LIMITED or generate 51.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICON PROPERTIES LIMITED vs. MALAWI PROPERTY INVESTMENT
Performance |
| Timeline |
| ICON PROPERTIES |
| MALAWI PROPERTY INVE |
ICON PROPERTIES and MALAWI PROPERTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICON PROPERTIES and MALAWI PROPERTY
The main advantage of trading using opposite ICON PROPERTIES and MALAWI PROPERTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON PROPERTIES position performs unexpectedly, MALAWI PROPERTY 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 MALAWI PROPERTY will offset losses from the drop in MALAWI PROPERTY's long position.| ICON PROPERTIES vs. NBS BANK LIMITED | ICON PROPERTIES vs. MALAWI PROPERTY INVESTMENT | ICON PROPERTIES vs. NATIONAL INVESTMENT TRUST | ICON PROPERTIES vs. BLANTYRE HOTELS LIMITED |
| MALAWI PROPERTY vs. NATIONAL INVESTMENT TRUST | MALAWI PROPERTY vs. FDH BANK PLC | MALAWI PROPERTY vs. STANDARD BANK LIMITED | MALAWI PROPERTY vs. SUNBIRD HOTELS TOURISM |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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