Correlation Between Icon Media and Grow Solutions

Can any of the company-specific risk be diversified away by investing in both Icon Media and Grow Solutions 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 Grow Solutions 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 Grow Solutions Holdings, you can compare the effects of market volatilities on Icon Media and Grow Solutions 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 Grow Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Media and Grow Solutions.

Diversification Opportunities for Icon Media and Grow Solutions

0.0

Correlation Coefficient

Icon Media  Grow Solutions

Pay attention - limited upside

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

Pair Corralation between Icon Media and Grow Solutions

If you would invest  0.02  in Icon Media Holdings on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Icon Media Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Icon Media Holdings  vs.  Grow Solutions Holdings

Icon Media Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Media Holdings are ranked lower than 6 (%) 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.

Grow Solutions Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grow Solutions Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Grow Solutions is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Icon Media and Grow Solutions

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

The idea behind Icon Media Holdings and Grow Solutions Holdings 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.

Check out your portfolio center.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.