Correlation Between Icon Offshore and Binasat Communications

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

By analyzing existing cross correlation between Icon Offshore Bhd and Binasat Communications Bhd, you can compare the effects of market volatilities on Icon Offshore and Binasat Communications 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 Offshore with a short position of Binasat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Offshore and Binasat Communications.

Diversification Opportunities for Icon Offshore and Binasat Communications

0.44

Correlation Coefficient

Icon Offshore  Binasat Communications

Very weak diversification

The 3 months correlation between Icon and Binasat is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and Binasat Communications Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binasat Communications and Icon Offshore 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 Offshore Bhd are associated (or correlated) with Binasat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binasat Communications has no effect on the direction of Icon Offshore i.e., Icon Offshore and Binasat Communications go up and down completely randomly.

Pair Corralation between Icon Offshore and Binasat Communications

Assuming the 90 days trading horizon Icon Offshore Bhd is expected to generate 1.45 times more return on investment than Binasat Communications. However, Icon Offshore is 1.45 times more volatile than Binasat Communications Bhd. It trades about 0.05 of its potential returns per unit of risk. Binasat Communications Bhd is currently generating about -0.01 per unit of risk. If you would invest  51.00  in Icon Offshore Bhd on October 11, 2024 and sell it today you would earn a total of  49.00  from holding Icon Offshore Bhd or generate 96.08% return on investment over 90 days.

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

Icon Offshore Bhd  vs.  Binasat Communications Bhd

Icon Offshore Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icon Offshore Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Binasat Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Binasat Communications Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Icon Offshore and Binasat Communications

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

The idea behind Icon Offshore Bhd and Binasat Communications Bhd 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.