Correlation Between Algorand and ICON Project
Can any of the company-specific risk be diversified away by investing in both Algorand and ICON Project 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 Algorand and ICON Project into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algorand and ICON Project, you can compare the effects of market volatilities on Algorand and ICON Project 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 Algorand with a short position of ICON Project. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algorand and ICON Project.
Diversification Opportunities for Algorand and ICON Project
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Algorand and ICON is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and ICON Project in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON Project and Algorand 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 Algorand are associated (or correlated) with ICON Project. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON Project has no effect on the direction of Algorand i.e., Algorand and ICON Project go up and down completely randomly.
Pair Corralation between Algorand and ICON Project
Assuming the 90 days trading horizon Algorand is expected to under-perform the ICON Project. But the crypto coin apears to be less risky and, when comparing its historical volatility, Algorand is 1.19 times less risky than ICON Project. The crypto coin trades about -0.29 of its potential returns per unit of risk. The ICON Project is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 37.00 in ICON Project on January 25, 2024 and sell it today you would lose (12.00) from holding ICON Project or give up 32.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Algorand vs. ICON Project
Performance |
| Timeline |
| Algorand |
| ICON Project |
Algorand and ICON Project Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algorand and ICON Project
The main advantage of trading using opposite Algorand and ICON Project positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algorand position performs unexpectedly, ICON Project 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 Project will offset losses from the drop in ICON Project's long position.The idea behind Algorand and ICON Project 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |