Correlation Between Israel Canada and Icon

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

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

Diversification Opportunities for Israel Canada and Icon

0.76

Correlation Coefficient

Israel Canada  Icon

Poor diversification

The 3 months correlation between Israel and Icon is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Israel Canada and Icon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Group and Israel Canada 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 Israel Canada are associated (or correlated) with Icon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Group has no effect on the direction of Israel Canada i.e., Israel Canada and Icon go up and down completely randomly.

Pair Corralation between Israel Canada and Icon

Assuming the 90 days trading horizon Israel Canada is expected to generate 0.89 times more return on investment than Icon. However, Israel Canada is 1.12 times less risky than Icon. It trades about 0.22 of its potential returns per unit of risk. Icon Group is currently generating about 0.07 per unit of risk. If you would invest  123,800  in Israel Canada on April 23, 2025 and sell it today you would earn a total of  43,700  from holding Israel Canada or generate 35.3% return on investment over 90 days.

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

Israel Canada  vs.  Icon Group

Israel Canada

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Canada are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Israel Canada sustained solid returns over the last few months and may actually be approaching a breakup point.

Icon Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Icon sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Israel Canada and Icon

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

The idea behind Israel Canada and Icon Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.