Correlation Between Atacama Resources and Icon Media

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

By analyzing existing cross correlation between Atacama Resources International and Icon Media Holdings, you can compare the effects of market volatilities on Atacama Resources and Icon Media 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 Atacama Resources with a short position of Icon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atacama Resources and Icon Media.

Diversification Opportunities for Atacama Resources and Icon Media

-0.12

Correlation Coefficient

Atacama Resources  Icon Media

Good diversification

The 3 months correlation between Atacama and Icon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Atacama Resources Internationa and Icon Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Media Holdings and Atacama Resources 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 Atacama Resources International are associated (or correlated) with Icon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Media Holdings has no effect on the direction of Atacama Resources i.e., Atacama Resources and Icon Media go up and down completely randomly.

Pair Corralation between Atacama Resources and Icon Media

Given the investment horizon of 90 days Atacama Resources International is expected to under-perform the Icon Media. But the pink sheet apears to be less risky and, when comparing its historical volatility, Atacama Resources International is 1.85 times less risky than Icon Media. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Icon Media Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Icon Media Holdings on December 28, 2024 and sell it today you would earn a total of  0.01  from holding Icon Media Holdings or generate 50.0% return on investment over 90 days.

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

Atacama Resources Internationa  vs.  Icon Media Holdings

Atacama Resources

Risk-Adjusted Performance

Very Weak

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

Icon Media Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Media Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Icon Media displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atacama Resources and Icon Media

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

The idea behind Atacama Resources International and Icon Media Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.