Correlation Between Aristocrat Group and Iconic Brands

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

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

Diversification Opportunities for Aristocrat Group and Iconic Brands

0.0

Correlation Coefficient

Aristocrat Group  Iconic Brands

Pay attention - limited upside

The 3 months correlation between Aristocrat and Iconic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Group Corp and Iconic Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iconic Brands and Aristocrat Group 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 Aristocrat Group Corp are associated (or correlated) with Iconic Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iconic Brands has no effect on the direction of Aristocrat Group i.e., Aristocrat Group and Iconic Brands go up and down completely randomly.

Pair Corralation between Aristocrat Group and Iconic Brands

If you would invest  9.84  in Aristocrat Group Corp on December 30, 2024 and sell it today you would lose (3.36) from holding Aristocrat Group Corp or give up 34.15% of portfolio value over 90 days.

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

Aristocrat Group Corp  vs.  Iconic Brands

Aristocrat Group Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aristocrat Group Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Aristocrat Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Iconic Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iconic Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iconic Brands is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aristocrat Group and Iconic Brands

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

The idea behind Aristocrat Group Corp and Iconic Brands 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.