Correlation Between ICON Project and NEO
Can any of the company-specific risk be diversified away by investing in both ICON Project and NEO 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 NEO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICON Project and NEO, you can compare the effects of market volatilities on ICON Project and NEO 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 NEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICON Project and NEO.
Diversification Opportunities for ICON Project and NEO
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ICON and NEO is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ICON Project and NEO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEO 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 NEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEO has no effect on the direction of ICON Project i.e., ICON Project and NEO go up and down completely randomly.
Pair Corralation between ICON Project and NEO
Assuming the 90 days trading horizon ICON Project is expected to generate 1.28 times more return on investment than NEO. However, ICON Project is 1.28 times more volatile than NEO. It trades about 0.17 of its potential returns per unit of risk. NEO is currently generating about 0.14 per unit of risk. If you would invest 27.00 in ICON Project on December 29, 2023 and sell it today you would earn a total of 7.00 from holding ICON Project or generate 25.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ICON Project vs. NEO
Performance |
Timeline |
ICON Project |
NEO |
ICON Project and NEO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICON Project and NEO
The main advantage of trading using opposite ICON Project and NEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICON Project position performs unexpectedly, NEO 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 NEO will offset losses from the drop in NEO's long position.ICON Project vs. Ethereum | ICON Project vs. Cardano | ICON Project vs. Avalanche | ICON Project vs. Internet Computer |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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