Correlation Between Icon Energy and Equinix
Can any of the company-specific risk be diversified away by investing in both Icon Energy and Equinix 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 Energy and Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Energy Corp and Equinix, you can compare the effects of market volatilities on Icon Energy and Equinix 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 Energy with a short position of Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Energy and Equinix.
Diversification Opportunities for Icon Energy and Equinix
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Icon and Equinix is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Icon Energy Corp and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and Icon Energy 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 Energy Corp are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Icon Energy i.e., Icon Energy and Equinix go up and down completely randomly.
Pair Corralation between Icon Energy and Equinix
Given the investment horizon of 90 days Icon Energy Corp is expected to under-perform the Equinix. In addition to that, Icon Energy is 3.51 times more volatile than Equinix. It trades about -0.02 of its total potential returns per unit of risk. Equinix is currently generating about 0.06 per unit of volatility. If you would invest 72,791 in Equinix on August 31, 2024 and sell it today you would earn a total of 25,357 from holding Equinix or generate 34.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 26.74% |
| Values | Daily Returns |
Icon Energy Corp vs. Equinix
Performance |
| Timeline |
| Icon Energy Corp |
| Equinix |
Icon Energy and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Energy and Equinix
The main advantage of trading using opposite Icon Energy and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Energy position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| Icon Energy vs. Lion One Metals | Icon Energy vs. Link Real Estate | Icon Energy vs. Montauk Renewables | Icon Energy vs. East Africa Metals |
| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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