Correlation Between Icon Energy and Mosaic

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

Diversification Opportunities for Icon Energy and Mosaic

-0.01

Correlation Coefficient

Icon Energy  Mosaic

Good diversification

The 3 months correlation between Icon and Mosaic is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Icon Energy Corp and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Icon Energy i.e., Icon Energy and Mosaic go up and down completely randomly.

Pair Corralation between Icon Energy and Mosaic

Given the investment horizon of 90 days Icon Energy Corp is expected to generate 2.64 times more return on investment than Mosaic. However, Icon Energy is 2.64 times more volatile than The Mosaic. It trades about 0.23 of its potential returns per unit of risk. The Mosaic is currently generating about -0.04 per unit of risk. If you would invest  209.00  in Icon Energy Corp on September 5, 2024 and sell it today you would earn a total of  71.00  from holding Icon Energy Corp or generate 33.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Icon Energy Corp  vs.  The Mosaic

Icon Energy Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Energy Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Icon Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Mosaic

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mosaic is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Icon Energy and Mosaic

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

The idea behind Icon Energy Corp and The Mosaic 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.