Correlation Between Icon Long/short and VivoPower International

Can any of the company-specific risk be diversified away by investing in both Icon Long/short and VivoPower International 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 Long/short and VivoPower International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Icon Longshort Fund and VivoPower International PLC, you can compare the effects of market volatilities on Icon Long/short and VivoPower International 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 Long/short with a short position of VivoPower International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Long/short and VivoPower International.

Diversification Opportunities for Icon Long/short and VivoPower International

0.43

Correlation Coefficient

Icon Long/short  VivoPower International

Very weak diversification

The 3 months correlation between Icon and VivoPower is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Icon Longshort Fund and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International and Icon Long/short 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 Longshort Fund are associated (or correlated) with VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of Icon Long/short i.e., Icon Long/short and VivoPower International go up and down completely randomly.

Pair Corralation between Icon Long/short and VivoPower International

Assuming the 90 days horizon Icon Long/short is expected to generate 4.6 times less return on investment than VivoPower International. But when comparing it to its historical volatility, Icon Longshort Fund is 10.03 times less risky than VivoPower International. It trades about 0.16 of its potential returns per unit of risk. VivoPower International PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  344.00  in VivoPower International PLC on May 4, 2025 and sell it today you would earn a total of  47.00  from holding VivoPower International PLC or generate 13.66% return on investment over 90 days.

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

Icon Longshort Fund  vs.  VivoPower International PLC

Icon Long/short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Longshort Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Long/short may actually be approaching a critical reversion point that can send shares even higher in September 2025.

VivoPower International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icon Long/short and VivoPower International

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

The idea behind Icon Longshort Fund and VivoPower International PLC 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.