Correlation Between Hedera Hashgraph and ICON Project

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

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

Diversification Opportunities for Hedera Hashgraph and ICON Project

0.23

Correlation Coefficient

Hedera Hashgraph  ICON Project

Modest diversification

The 3 months correlation between Hedera and ICON is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hedera Hashgraph and ICON Project in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON Project and Hedera Hashgraph 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 Hedera Hashgraph are associated (or correlated) with ICON Project. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON Project has no effect on the direction of Hedera Hashgraph i.e., Hedera Hashgraph and ICON Project go up and down completely randomly.

Pair Corralation between Hedera Hashgraph and ICON Project

Assuming the 90 days trading horizon Hedera Hashgraph is expected to generate 1.81 times more return on investment than ICON Project. However, Hedera Hashgraph is 1.81 times more volatile than ICON Project. It trades about 0.13 of its potential returns per unit of risk. ICON Project is currently generating about -0.01 per unit of risk. If you would invest  12.00  in Hedera Hashgraph on November 19, 2024 and sell it today you would earn a total of  11.00  from holding Hedera Hashgraph or generate 91.67% return on investment over 90 days.

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

Hedera Hashgraph  vs.  ICON Project

Hedera Hashgraph

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hedera Hashgraph are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Hedera Hashgraph exhibited solid returns over the last few months and may actually be approaching a breakup point.

ICON Project

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICON Project has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ICON Project is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hedera Hashgraph and ICON Project

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

The idea behind Hedera Hashgraph and ICON Project 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..