Correlation Between Icon Energy and BOS Better

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

By analyzing existing cross correlation between Icon Energy Corp and BOS Better Online, you can compare the effects of market volatilities on Icon Energy and BOS Better 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 Energy with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Energy and BOS Better.

Diversification Opportunities for Icon Energy and BOS Better

0.67

Correlation Coefficient

Icon Energy  BOS Better

Poor diversification

The 3 months correlation between Icon and BOS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Icon Energy Corp and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online and Icon Energy 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 Energy Corp are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Icon Energy i.e., Icon Energy and BOS Better go up and down completely randomly.

Pair Corralation between Icon Energy and BOS Better

Given the investment horizon of 90 days Icon Energy Corp is expected to generate 5.89 times more return on investment than BOS Better. However, Icon Energy is 5.89 times more volatile than BOS Better Online. It trades about 0.09 of its potential returns per unit of risk. BOS Better Online is currently generating about 0.4 per unit of risk. If you would invest  215.00  in Icon Energy Corp on September 15, 2024 and sell it today you would earn a total of  19.00  from holding Icon Energy Corp or generate 8.84% return on investment over 90 days.

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

Icon Energy Corp  vs.  BOS Better Online

Icon Energy Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Energy Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Icon Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BOS Better Online

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BOS Better exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icon Energy and BOS Better

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

The idea behind Icon Energy Corp and BOS Better Online 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.