Correlation Between Pangaea Logistic and Icon Energy

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

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

Diversification Opportunities for Pangaea Logistic and Icon Energy

0.21

Correlation Coefficient

Pangaea Logistic  Icon Energy

Modest diversification

The 3 months correlation between Pangaea and Icon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pangaea Logistic and Icon Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Energy Corp and Pangaea Logistic 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 Pangaea Logistic are associated (or correlated) with Icon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Energy Corp has no effect on the direction of Pangaea Logistic i.e., Pangaea Logistic and Icon Energy go up and down completely randomly.

Pair Corralation between Pangaea Logistic and Icon Energy

Given the investment horizon of 90 days Pangaea Logistic is expected to generate 0.2 times more return on investment than Icon Energy. However, Pangaea Logistic is 5.07 times less risky than Icon Energy. It trades about 0.04 of its potential returns per unit of risk. Icon Energy Corp is currently generating about -0.28 per unit of risk. If you would invest  480.00  in Pangaea Logistic on December 27, 2024 and sell it today you would earn a total of  24.00  from holding Pangaea Logistic or generate 5.0% return on investment over 90 days.

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

Pangaea Logistic  vs.  Icon Energy Corp

Pangaea Logistic

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pangaea Logistic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Pangaea Logistic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 unfluctuating 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.

Pair Trading with Pangaea Logistic and Icon Energy

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

The idea behind Pangaea Logistic and Icon Energy Corp 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.