Correlation Between Icon Energy and Costamare

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

Diversification Opportunities for Icon Energy and Costamare

0.9

Correlation Coefficient

Icon Energy  Costamare

Almost no diversification

The 3 months correlation between Icon and Costamare is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Icon Energy Corp and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare 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 Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Icon Energy i.e., Icon Energy and Costamare go up and down completely randomly.

Pair Corralation between Icon Energy and Costamare

Given the investment horizon of 90 days Icon Energy Corp is expected to under-perform the Costamare. In addition to that, Icon Energy is 7.35 times more volatile than Costamare. It trades about -0.31 of its total potential returns per unit of risk. Costamare is currently generating about -0.18 per unit of volatility. If you would invest  1,263  in Costamare on December 29, 2024 and sell it today you would lose (267.00) from holding Costamare or give up 21.14% of portfolio value over 90 days.

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

Icon Energy Corp  vs.  Costamare

Icon Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icon Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Costamare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costamare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Icon Energy and Costamare

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

The idea behind Icon Energy Corp and Costamare 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.