Correlation Between Iconic Brands and Aristocrat Group

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

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

Diversification Opportunities for Iconic Brands and Aristocrat Group

0.0

Correlation Coefficient

Iconic Brands  Aristocrat Group

Pay attention - limited upside

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

Pair Corralation between Iconic Brands and Aristocrat Group

If you would invest  0.71  in Aristocrat Group Corp on December 3, 2024 and sell it today you would earn a total of  8.58  from holding Aristocrat Group Corp or generate 1208.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Iconic Brands  vs.  Aristocrat Group Corp

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.

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 18 (%) 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.

Pair Trading with Iconic Brands and Aristocrat Group

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

The idea behind Iconic Brands and Aristocrat Group Corp 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.