Correlation Between ICON Project and Bitcoin Gold

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

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

Diversification Opportunities for ICON Project and Bitcoin Gold

0.91

Correlation Coefficient

ICON Project  Bitcoin Gold

Almost no diversification

The 3 months correlation between ICON and Bitcoin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and Bitcoin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Gold and ICON Project 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 Project are associated (or correlated) with Bitcoin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Gold has no effect on the direction of ICON Project i.e., ICON Project and Bitcoin Gold go up and down completely randomly.

Pair Corralation between ICON Project and Bitcoin Gold

Assuming the 90 days trading horizon ICON Project is expected to under-perform the Bitcoin Gold. In addition to that, ICON Project is 1.65 times more volatile than Bitcoin Gold. It trades about -0.13 of its total potential returns per unit of risk. Bitcoin Gold is currently generating about -0.17 per unit of volatility. If you would invest  4,006  in Bitcoin Gold on January 20, 2024 and sell it today you would lose (761.00) from holding Bitcoin Gold or give up 19.0% of portfolio value over 90 days.

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

ICON Project  vs.  Bitcoin Gold

ICON Project

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICON Project are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ICON Project exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bitcoin Gold

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Gold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Bitcoin Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICON Project and Bitcoin Gold

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

The idea behind ICON Project and Bitcoin Gold 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.