Correlation Between ICOA and All American

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

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

Diversification Opportunities for ICOA and All American

-0.15

Correlation Coefficient

ICOA  All American

Good diversification

The 3 months correlation between ICOA and All is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ICOA Inc and All American Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Pet and ICOA 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 ICOA Inc 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 Pet has no effect on the direction of ICOA i.e., ICOA and All American go up and down completely randomly.

Pair Corralation between ICOA and All American

Given the investment horizon of 90 days ICOA Inc is expected to generate 17.05 times more return on investment than All American. However, ICOA is 17.05 times more volatile than All American Pet. It trades about 0.2 of its potential returns per unit of risk. All American Pet is currently generating about -0.13 per unit of risk. If you would invest  0.01  in ICOA Inc on October 23, 2024 and sell it today you would earn a total of  0.00  from holding ICOA Inc or generate 0.0% return on investment over 90 days.

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

ICOA Inc  vs.  All American Pet

ICOA Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ICOA Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, ICOA sustained solid returns over the last few months and may actually be approaching a breakup point.

All American Pet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days All American Pet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ICOA and All American

The main advantage of trading using opposite ICOA and All American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICOA 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 ICOA Inc and All American Pet 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.