Correlation Between Apptech Corp and Icon Information

Can any of the company-specific risk be diversified away by investing in both Apptech Corp 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 Apptech Corp and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apptech Corp and Icon Information Technology, you can compare the effects of market volatilities on Apptech Corp 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 Apptech Corp with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apptech Corp and Icon Information.

Diversification Opportunities for Apptech Corp and Icon Information

-0.66

Correlation Coefficient

Apptech Corp  Icon Information

Excellent diversification

The 3 months correlation between Apptech and Icon is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Apptech Corp 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 Apptech Corp 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 Apptech Corp 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 Apptech Corp i.e., Apptech Corp and Icon Information go up and down completely randomly.

Pair Corralation between Apptech Corp and Icon Information

Given the investment horizon of 90 days Apptech Corp is expected to generate 31.12 times more return on investment than Icon Information. However, Apptech Corp is 31.12 times more volatile than Icon Information Technology. It trades about 0.12 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.21 per unit of risk. If you would invest  29.00  in Apptech Corp on April 25, 2025 and sell it today you would earn a total of  1.00  from holding Apptech Corp or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	47.54%
Values	Daily Returns

Apptech Corp  vs.  Icon Information Technology

Apptech Corp

Risk-Adjusted Performance

OK

Over the last 90 days Apptech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Apptech Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Icon Information Tec

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Information Technology are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Icon Information showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apptech Corp and Icon Information

The main advantage of trading using opposite Apptech Corp and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apptech Corp 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.

The idea behind Apptech Corp and Icon Information Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.