Correlation Between ICON Project and SOLVE
Can any of the company-specific risk be diversified away by investing in both ICON Project and SOLVE 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 Project and SOLVE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON Project and SOLVE, you can compare the effects of market volatilities on ICON Project and SOLVE 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 Project with a short position of SOLVE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON Project and SOLVE.
Diversification Opportunities for ICON Project and SOLVE
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICON and SOLVE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and SOLVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLVE and ICON Project 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 Project are associated (or correlated) with SOLVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLVE has no effect on the direction of ICON Project i.e., ICON Project and SOLVE go up and down completely randomly.
Pair Corralation between ICON Project and SOLVE
Assuming the 90 days trading horizon ICON Project is expected to generate 1.09 times less return on investment than SOLVE. In addition to that, ICON Project is 1.19 times more volatile than SOLVE. It trades about 0.17 of its total potential returns per unit of risk. SOLVE is currently generating about 0.22 per unit of volatility. If you would invest 2.14 in SOLVE on December 30, 2023 and sell it today you would earn a total of 0.63 from holding SOLVE or generate 29.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ICON Project vs. SOLVE
Performance |
Timeline |
ICON Project |
SOLVE |
ICON Project and SOLVE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICON Project and SOLVE
The main advantage of trading using opposite ICON Project and SOLVE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON Project position performs unexpectedly, SOLVE 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 SOLVE will offset losses from the drop in SOLVE's long position.ICON Project vs. Ethereum | ICON Project vs. Cardano | ICON Project vs. Avalanche | ICON Project vs. Internet Computer |
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 Stocks Directory module to find actively traded stocks across global markets.
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