Correlation Between Icape Holding and Making Science

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

By analyzing existing cross correlation between Icape Holding and Making Science Group, you can compare the effects of market volatilities on Icape Holding and Making Science 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 Icape Holding with a short position of Making Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icape Holding and Making Science.

Diversification Opportunities for Icape Holding and Making Science

-0.62

Correlation Coefficient

Icape Holding  Making Science

Excellent diversification

The 3 months correlation between Icape and Making is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Icape Holding and Making Science Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Making Science Group and Icape Holding 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 Icape Holding are associated (or correlated) with Making Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Making Science Group has no effect on the direction of Icape Holding i.e., Icape Holding and Making Science go up and down completely randomly.

Pair Corralation between Icape Holding and Making Science

Assuming the 90 days trading horizon Icape Holding is expected to generate 2.92 times more return on investment than Making Science. However, Icape Holding is 2.92 times more volatile than Making Science Group. It trades about 0.0 of its potential returns per unit of risk. Making Science Group is currently generating about -0.1 per unit of risk. If you would invest  940.00  in Icape Holding on October 24, 2024 and sell it today you would lose (40.00) from holding Icape Holding or give up 4.26% of portfolio value over 90 days.

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

Icape Holding  vs.  Making Science Group

Icape Holding

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Icape Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Icape Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Making Science Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Making Science Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Icape Holding and Making Science

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

The idea behind Icape Holding and Making Science Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.