Correlation Between Icon and Ralco Agencies
Can any of the company-specific risk be diversified away by investing in both Icon and Ralco Agencies 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 and Ralco Agencies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Group and Ralco Agencies, you can compare the effects of market volatilities on Icon and Ralco Agencies 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 with a short position of Ralco Agencies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon and Ralco Agencies.
Diversification Opportunities for Icon and Ralco Agencies
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Ralco is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Icon Group and Ralco Agencies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralco Agencies and Icon 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 Group are associated (or correlated) with Ralco Agencies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralco Agencies has no effect on the direction of Icon i.e., Icon and Ralco Agencies go up and down completely randomly.
Pair Corralation between Icon and Ralco Agencies
Assuming the 90 days trading horizon Icon Group is expected to under-perform the Ralco Agencies. But the stock apears to be less risky and, when comparing its historical volatility, Icon Group is 1.43 times less risky than Ralco Agencies. The stock trades about -0.01 of its potential returns per unit of risk. The Ralco Agencies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 279,573 in Ralco Agencies on September 3, 2024 and sell it today you would earn a total of 170,427 from holding Ralco Agencies or generate 60.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Group vs. Ralco Agencies
Performance |
| Timeline |
| Icon Group |
| Ralco Agencies |
Icon and Ralco Agencies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon and Ralco Agencies
The main advantage of trading using opposite Icon and Ralco Agencies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon position performs unexpectedly, Ralco Agencies 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 Ralco Agencies will offset losses from the drop in Ralco Agencies' long position.| Icon vs. IDI Insurance | Icon vs. Sure Tech Investments LP | Icon vs. Libra Insurance | Icon vs. Rapac Communication Infrastructure |
| Ralco Agencies vs. Brimag L | Ralco Agencies vs. Neto ME Holdings | Ralco Agencies vs. Qualitau | Ralco Agencies vs. Delek Automotive Systems |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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