Correlation Between NICO HOLDINGS and ICON PROPERTIES

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

By analyzing existing cross correlation between NICO HOLDINGS LIMITED and ICON PROPERTIES LIMITED, you can compare the effects of market volatilities on NICO HOLDINGS and ICON PROPERTIES 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 NICO HOLDINGS with a short position of ICON PROPERTIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NICO HOLDINGS and ICON PROPERTIES.

Diversification Opportunities for NICO HOLDINGS and ICON PROPERTIES

-0.92

Correlation Coefficient

NICO HOLDINGS  ICON PROPERTIES

Pay attention - limited upside

The 3 months correlation between NICO and ICON is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding NICO HOLDINGS LIMITED and ICON PROPERTIES LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON PROPERTIES and NICO HOLDINGS 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 NICO HOLDINGS LIMITED are associated (or correlated) with ICON PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON PROPERTIES has no effect on the direction of NICO HOLDINGS i.e., NICO HOLDINGS and ICON PROPERTIES go up and down completely randomly.

Pair Corralation between NICO HOLDINGS and ICON PROPERTIES

Assuming the 90 days trading horizon NICO HOLDINGS LIMITED is expected to generate 115.45 times more return on investment than ICON PROPERTIES. However, NICO HOLDINGS is 115.45 times more volatile than ICON PROPERTIES LIMITED. It trades about 0.34 of its potential returns per unit of risk. ICON PROPERTIES LIMITED is currently generating about -0.34 per unit of risk. If you would invest  41,901  in NICO HOLDINGS LIMITED on December 20, 2024 and sell it today you would earn a total of  36,041  from holding NICO HOLDINGS LIMITED or generate 86.01% return on investment over 90 days.

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

NICO HOLDINGS LIMITED  vs.  ICON PROPERTIES LIMITED

NICO HOLDINGS LIMITED

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in NICO HOLDINGS LIMITED are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, NICO HOLDINGS unveiled solid returns over the last few months and may actually be approaching a breakup point.

ICON PROPERTIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICON PROPERTIES LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ICON PROPERTIES 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 NICO HOLDINGS and ICON PROPERTIES

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

The idea behind NICO HOLDINGS LIMITED and ICON PROPERTIES LIMITED 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.