Correlation Between Icon Energy and Mosaic
Can any of the company-specific risk be diversified away by investing in both Icon Energy and Mosaic 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 Mosaic 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 The Mosaic, you can compare the effects of market volatilities on Icon Energy and Mosaic 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 Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Energy and Mosaic.
Diversification Opportunities for Icon Energy and Mosaic
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icon and Mosaic is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Icon Energy Corp and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Icon Energy i.e., Icon Energy and Mosaic go up and down completely randomly.
Pair Corralation between Icon Energy and Mosaic
Given the investment horizon of 90 days Icon Energy Corp is expected to under-perform the Mosaic. In addition to that, Icon Energy is 2.4 times more volatile than The Mosaic. It trades about -0.02 of its total potential returns per unit of risk. The Mosaic is currently generating about -0.03 per unit of volatility. If you would invest 4,320 in The Mosaic on September 5, 2024 and sell it today you would lose (1,562) from holding The Mosaic or give up 36.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 20.65% |
| Values | Daily Returns |
Icon Energy Corp vs. The Mosaic
Performance |
| Timeline |
| Icon Energy Corp |
| Mosaic |
Icon Energy and Mosaic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Energy and Mosaic
The main advantage of trading using opposite Icon Energy and Mosaic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Energy position performs unexpectedly, Mosaic 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 Mosaic will offset losses from the drop in Mosaic's long position.| Icon Energy vs. The Mosaic | Icon Energy vs. Entegris | Icon Energy vs. Luxfer Holdings PLC | Icon Energy vs. Aehr Test 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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