Correlation Between Icon Offshore and Magni Tech

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

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

Diversification Opportunities for Icon Offshore and Magni Tech

-0.4

Correlation Coefficient

Icon Offshore  Magni Tech

Very good diversification

The 3 months correlation between Icon and Magni is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Icon Offshore Bhd and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries and Icon Offshore 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 Offshore Bhd are associated (or correlated) with Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Icon Offshore i.e., Icon Offshore and Magni Tech go up and down completely randomly.

Pair Corralation between Icon Offshore and Magni Tech

Assuming the 90 days trading horizon Icon Offshore Bhd is expected to under-perform the Magni Tech. In addition to that, Icon Offshore is 2.17 times more volatile than Magni Tech Industries. It trades about -0.11 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.17 per unit of volatility. If you would invest  255.00  in Magni Tech Industries on September 16, 2024 and sell it today you would earn a total of  31.00  from holding Magni Tech Industries or generate 12.16% return on investment over 90 days.

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

Icon Offshore Bhd  vs.  Magni Tech Industries

Icon Offshore Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icon Offshore Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Magni Tech Industries

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Magni Tech Industries are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Magni Tech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Icon Offshore and Magni Tech

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

The idea behind Icon Offshore Bhd and Magni Tech Industries 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.