Correlation Between NYSE Composite and Icon Information
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Icon Information 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 Information 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 Information Technology, you can compare the effects of market volatilities on NYSE Composite and Icon Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Icon Information.
Diversification Opportunities for NYSE Composite and Icon Information
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Icon is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of NYSE Composite i.e., NYSE Composite and Icon Information go up and down completely randomly.
Pair Corralation between NYSE Composite and Icon Information
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.01 times less return on investment than Icon Information. But when comparing it to its historical volatility, NYSE Composite is 1.81 times less risky than Icon Information. It trades about 0.24 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,666 in Icon Information Technology on August 28, 2024 and sell it today you would earn a total of 56.00 from holding Icon Information Technology or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Icon Information Technology
Performance |
| Timeline |
NYSE Composite and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Icon Information Technology
Pair trading matchups for Icon Information
Pair Trading with NYSE Composite and Icon Information
The main advantage of trading using opposite NYSE Composite and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Icon Information 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 Information will offset losses from the drop in Icon Information'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 Information vs. VEEA | Icon Information vs. VivoPower International PLC | Icon Information vs. WEBTOON Entertainment Common | Icon Information vs. Icon Bond Fund |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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