Correlation Between Helix Applications and ICOA

Can any of the company-specific risk be diversified away by investing in both Helix Applications and ICOA 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 Helix Applications and ICOA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Helix Applications and ICOA Inc, you can compare the effects of market volatilities on Helix Applications and ICOA 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 Helix Applications with a short position of ICOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helix Applications and ICOA.

Diversification Opportunities for Helix Applications and ICOA

-0.25

Correlation Coefficient

Helix Applications  ICOA

Very good diversification

The 3 months correlation between Helix and ICOA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Helix Applications and ICOA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICOA Inc and Helix Applications 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 Helix Applications are associated (or correlated) with ICOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICOA Inc has no effect on the direction of Helix Applications i.e., Helix Applications and ICOA go up and down completely randomly.

Pair Corralation between Helix Applications and ICOA

Assuming the 90 days horizon Helix Applications is expected to generate 1.1 times less return on investment than ICOA. In addition to that, Helix Applications is 1.79 times more volatile than ICOA Inc. It trades about 0.04 of its total potential returns per unit of risk. ICOA Inc is currently generating about 0.09 per unit of volatility. If you would invest  0.12  in ICOA Inc on March 4, 2024 and sell it today you would lose (0.11) from holding ICOA Inc or give up 91.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Helix Applications  vs.  ICOA Inc

Helix Applications

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Helix Applications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Helix Applications reported solid returns over the last few months and may actually be approaching a breakup point.

ICOA Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICOA Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, ICOA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helix Applications and ICOA

The main advantage of trading using opposite Helix Applications and ICOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helix Applications position performs unexpectedly, ICOA 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 ICOA will offset losses from the drop in ICOA's long position.

The idea behind Helix Applications and ICOA Inc 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.