Correlation Between ICON Project and IOTA
Can any of the company-specific risk be diversified away by investing in both ICON Project and IOTA 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 IOTA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON Project and IOTA, you can compare the effects of market volatilities on ICON Project and IOTA 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 IOTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON Project and IOTA.
Diversification Opportunities for ICON Project and IOTA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ICON and IOTA is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and IOTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOTA 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 IOTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOTA has no effect on the direction of ICON Project i.e., ICON Project and IOTA go up and down completely randomly.
Pair Corralation between ICON Project and IOTA
Assuming the 90 days trading horizon ICON Project is expected to generate 1.2 times more return on investment than IOTA. However, ICON Project is 1.2 times more volatile than IOTA. It trades about -0.24 of its potential returns per unit of risk. IOTA is currently generating about -0.33 per unit of risk. If you would invest 37.00 in ICON Project on January 24, 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 |
ICON Project vs. IOTA
Performance |
Timeline |
ICON Project |
IOTA |
ICON Project and IOTA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICON Project and IOTA
The main advantage of trading using opposite ICON Project and IOTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON Project position performs unexpectedly, IOTA 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 IOTA will offset losses from the drop in IOTA'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 CEOs Directory module to screen CEOs from public companies around the world.
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