Correlation Between NYSE Composite and Icon Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Icon Energy 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 NYSE Composite and Icon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Icon Energy Corp, you can compare the effects of market volatilities on NYSE Composite and Icon Energy 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 NYSE Composite with a short position of Icon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Icon Energy.
Diversification Opportunities for NYSE Composite and Icon Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Icon is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Icon Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Energy Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with Icon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Energy Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Icon Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Icon Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 8.44 times less return on investment than Icon Energy. But when comparing it to its historical volatility, NYSE Composite is 10.11 times less risky than Icon Energy. It trades about 0.24 of its potential returns per unit of risk. Icon Energy Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Icon Energy Corp on August 28, 2024 and sell it today you would earn a total of 62.00 from holding Icon Energy Corp or generate 27.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Icon Energy Corp
Performance |
| Timeline |
NYSE Composite and Icon Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Icon Energy Corp
Pair trading matchups for Icon Energy
Pair Trading with NYSE Composite and Icon Energy
The main advantage of trading using opposite NYSE Composite and Icon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Icon Energy 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 Icon Energy will offset losses from the drop in Icon Energy's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Icon Energy vs. Nasdaq Inc | Icon Energy vs. Meiwu Technology Co | Icon Energy vs. Nextplat Corp | Icon Energy vs. Aldel Financial II |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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