Correlation Between Icon Media and All American

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

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

Diversification Opportunities for Icon Media and All American

-0.44

Correlation Coefficient

Icon Media  All American

Very good diversification

The 3 months correlation between Icon and All is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Icon Media Holdings and All American Gld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Gld and Icon Media 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 Icon Media Holdings are associated (or correlated) with All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Gld has no effect on the direction of Icon Media i.e., Icon Media and All American go up and down completely randomly.

Pair Corralation between Icon Media and All American

Given the investment horizon of 90 days Icon Media is expected to generate 1.1 times less return on investment than All American. In addition to that, Icon Media is 1.49 times more volatile than All American Gld. It trades about 0.11 of its total potential returns per unit of risk. All American Gld is currently generating about 0.17 per unit of volatility. If you would invest  0.10  in All American Gld on October 10, 2024 and sell it today you would earn a total of  0.04  from holding All American Gld or generate 40.0% return on investment over 90 days.

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

Icon Media Holdings  vs.  All American Gld

Icon Media Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Media Holdings are ranked lower than 4 (%) 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.

All American Gld

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in All American Gld are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, All American exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icon Media and All American

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

The idea behind Icon Media Holdings and All American Gld 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.