Correlation Between ICON PLC and Ball
Can any of the company-specific risk be diversified away by investing in both ICON PLC and Ball 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 PLC and Ball into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON PLC and Ball Corporation, you can compare the effects of market volatilities on ICON PLC and Ball 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 PLC with a short position of Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON PLC and Ball.
Diversification Opportunities for ICON PLC and Ball
Poor diversification
The 3 months correlation between ICON and Ball is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ICON PLC and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and ICON PLC 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 PLC are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of ICON PLC i.e., ICON PLC and Ball go up and down completely randomly.
Pair Corralation between ICON PLC and Ball
Given the investment horizon of 90 days ICON PLC is expected to generate 2.92 times more return on investment than Ball. However, ICON PLC is 2.92 times more volatile than Ball Corporation. It trades about 0.08 of its potential returns per unit of risk. Ball Corporation is currently generating about 0.13 per unit of risk. If you would invest 14,302 in ICON PLC on May 5, 2025 and sell it today you would earn a total of 2,342 from holding ICON PLC or generate 16.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ICON PLC vs. Ball Corp.
Performance |
Timeline |
ICON PLC |
Ball |
ICON PLC and Ball Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICON PLC and Ball
The main advantage of trading using opposite ICON PLC and Ball positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON PLC position performs unexpectedly, Ball 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 Ball will offset losses from the drop in Ball's long position.ICON PLC vs. IQVIA Holdings | ICON PLC vs. Charles River Laboratories | ICON PLC vs. Laboratory of | ICON PLC vs. Medpace Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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