Correlation Between ICON Project and Ethereum Classic
Can any of the company-specific risk be diversified away by investing in both ICON Project and Ethereum Classic 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 Ethereum Classic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON Project and Ethereum Classic, you can compare the effects of market volatilities on ICON Project and Ethereum Classic 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 Ethereum Classic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON Project and Ethereum Classic.
Diversification Opportunities for ICON Project and Ethereum Classic
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ICON and Ethereum is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and Ethereum Classic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum Classic 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 Ethereum Classic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum Classic has no effect on the direction of ICON Project i.e., ICON Project and Ethereum Classic go up and down completely randomly.
Pair Corralation between ICON Project and Ethereum Classic
Assuming the 90 days trading horizon ICON Project is expected to generate 2.5 times less return on investment than Ethereum Classic. In addition to that, ICON Project is 1.23 times more volatile than Ethereum Classic. It trades about 0.02 of its total potential returns per unit of risk. Ethereum Classic is currently generating about 0.06 per unit of volatility. If you would invest 1,924 in Ethereum Classic on January 25, 2024 and sell it today you would earn a total of 879.00 from holding Ethereum Classic or generate 45.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICON Project vs. Ethereum Classic
Performance |
| Timeline |
| ICON Project |
| Ethereum Classic |
ICON Project and Ethereum Classic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICON Project and Ethereum Classic
The main advantage of trading using opposite ICON Project and Ethereum Classic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON Project position performs unexpectedly, Ethereum Classic 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 Ethereum Classic will offset losses from the drop in Ethereum Classic's long position.| ICON Project vs. Ethereum | ICON Project vs. Cardano | ICON Project vs. Avalanche | ICON Project vs. Internet Computer |
| Ethereum Classic vs. Bitcoin | Ethereum Classic vs. Dogecoin | Ethereum Classic vs. Bitcoin Cash | Ethereum Classic vs. Litecoin |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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