Correlation Between Visa and ICON PROPERTIES

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

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

Diversification Opportunities for Visa and ICON PROPERTIES

0.76

Correlation Coefficient

Visa  ICON PROPERTIES

Poor diversification

The 3 months correlation between Visa and ICON is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and ICON PROPERTIES LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON PROPERTIES and Visa 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 Visa Class A 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 Visa i.e., Visa and ICON PROPERTIES go up and down completely randomly.

Pair Corralation between Visa and ICON PROPERTIES

If you would invest  1,805  in ICON PROPERTIES LIMITED on October 12, 2024 and sell it today you would earn a total of  0.00  from holding ICON PROPERTIES LIMITED or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Visa Class A  vs.  ICON PROPERTIES LIMITED

Visa Class A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ICON PROPERTIES

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ICON PROPERTIES LIMITED are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ICON PROPERTIES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and ICON PROPERTIES

The main advantage of trading using opposite Visa and ICON PROPERTIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A 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.

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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.