Correlation Between Ultrack Systems and Icon Media

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

By analyzing existing cross correlation between Ultrack Systems and Icon Media Holdings, you can compare the effects of market volatilities on Ultrack Systems and Icon Media 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 Ultrack Systems with a short position of Icon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultrack Systems and Icon Media.

Diversification Opportunities for Ultrack Systems and Icon Media

-0.13

Correlation Coefficient

Ultrack Systems  Icon Media

Good diversification

The 3 months correlation between Ultrack and Icon is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ultrack Systems and Icon Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Media Holdings and Ultrack Systems 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 Ultrack Systems are associated (or correlated) with Icon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Media Holdings has no effect on the direction of Ultrack Systems i.e., Ultrack Systems and Icon Media go up and down completely randomly.

Pair Corralation between Ultrack Systems and Icon Media

Given the investment horizon of 90 days Ultrack Systems is expected to generate 2.71 times more return on investment than Icon Media. However, Ultrack Systems is 2.71 times more volatile than Icon Media Holdings. It trades about 0.19 of its potential returns per unit of risk. Icon Media Holdings is currently generating about 0.12 per unit of risk. If you would invest  0.02  in Ultrack Systems on December 28, 2024 and sell it today you would earn a total of  0.00  from holding Ultrack Systems or generate 0.0% return on investment over 90 days.

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

Ultrack Systems  vs.  Icon Media Holdings

Ultrack Systems

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ultrack Systems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating essential indicators, Ultrack Systems sustained solid returns over the last few months and may actually be approaching a breakup point.

Icon Media Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Media Holdings are ranked lower than 9 (%) 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.

Pair Trading with Ultrack Systems and Icon Media

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

The idea behind Ultrack Systems and Icon Media 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.