Correlation Between ICON Project and Gnosis
Can any of the company-specific risk be diversified away by investing in both ICON Project and Gnosis 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 Gnosis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON Project and Gnosis, you can compare the effects of market volatilities on ICON Project and Gnosis 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 Gnosis. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON Project and Gnosis.
Diversification Opportunities for ICON Project and Gnosis
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ICON and Gnosis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and Gnosis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gnosis 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 Gnosis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gnosis has no effect on the direction of ICON Project i.e., ICON Project and Gnosis go up and down completely randomly.
Pair Corralation between ICON Project and Gnosis
Assuming the 90 days trading horizon ICON Project is expected to under-perform the Gnosis. In addition to that, ICON Project is 1.62 times more volatile than Gnosis. It trades about -0.24 of its total potential returns per unit of risk. Gnosis is currently generating about 0.11 per unit of volatility. If you would invest 36,211 in Gnosis on January 24, 2024 and sell it today you would earn a total of 2,981 from holding Gnosis or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICON Project vs. Gnosis
Performance |
| Timeline |
| ICON Project |
| Gnosis |
ICON Project and Gnosis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICON Project and Gnosis
The main advantage of trading using opposite ICON Project and Gnosis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON Project position performs unexpectedly, Gnosis 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 Gnosis will offset losses from the drop in Gnosis' 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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