Correlation Between Icon Information and Small Cap

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

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

Diversification Opportunities for Icon Information and Small Cap

0.92

Correlation Coefficient

Icon Information  Small Cap

Almost no diversification

The 3 months correlation between Icon and Small is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core and Icon Information 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 Information Technology are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Core has no effect on the direction of Icon Information i.e., Icon Information and Small Cap go up and down completely randomly.

Pair Corralation between Icon Information and Small Cap

Assuming the 90 days horizon Icon Information Technology is expected to generate 0.86 times more return on investment than Small Cap. However, Icon Information Technology is 1.16 times less risky than Small Cap. It trades about 0.15 of its potential returns per unit of risk. Small Cap Core is currently generating about 0.07 per unit of risk. If you would invest  1,615  in Icon Information Technology on July 15, 2025 and sell it today you would earn a total of  156.00  from holding Icon Information Technology or generate 9.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Icon Information Technology  vs.  Small Cap Core

Icon Information Tec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Information Technology are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Icon Information may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Small Cap Core

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Core are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Small Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Icon Information and Small Cap

The main advantage of trading using opposite Icon Information and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.

The idea behind Icon Information Technology and Small Cap Core 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.