Correlation Between ICON Project and Algorand
Can any of the company-specific risk be diversified away by investing in both ICON Project and Algorand 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 Project and Algorand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON Project and Algorand, you can compare the effects of market volatilities on ICON Project and Algorand 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 Project with a short position of Algorand. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON Project and Algorand.
Diversification Opportunities for ICON Project and Algorand
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ICON and Algorand is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and Algorand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algorand and ICON Project 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 Project are associated (or correlated) with Algorand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algorand has no effect on the direction of ICON Project i.e., ICON Project and Algorand go up and down completely randomly.
Pair Corralation between ICON Project and Algorand
Assuming the 90 days trading horizon ICON Project is expected to generate 1.32 times more return on investment than Algorand. However, ICON Project is 1.32 times more volatile than Algorand. It trades about -0.07 of its potential returns per unit of risk. Algorand is currently generating about -0.19 per unit of risk. If you would invest 27.00 in ICON Project on January 17, 2024 and sell it today you would lose (5.00) from holding ICON Project or give up 18.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
ICON Project vs. Algorand
Performance |
| Timeline |
| ICON Project |
| Algorand |
ICON Project and Algorand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICON Project and Algorand
The main advantage of trading using opposite ICON Project and Algorand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON Project position performs unexpectedly, Algorand 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 Algorand will offset losses from the drop in Algorand's long position.| ICON Project vs. Ethereum | ICON Project vs. Cardano | ICON Project vs. Avalanche | ICON Project vs. Internet Computer |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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