Correlation Between FUNR and Icon Media

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

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

Diversification Opportunities for FUNR and Icon Media

0.0

Correlation Coefficient

FUNR  Icon Media

Pay attention - limited upside

The 3 months correlation between FUNR and Icon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FUNR and Icon Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Media Holdings and FUNR 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 FUNR are associated (or correlated) with Icon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Media Holdings has no effect on the direction of FUNR i.e., FUNR and Icon Media go up and down completely randomly.

Pair Corralation between FUNR and Icon Media

Given the investment horizon of 90 days FUNR is expected to generate 3.81 times more return on investment than Icon Media. However, FUNR is 3.81 times more volatile than Icon Media Holdings. It trades about 0.18 of its potential returns per unit of risk. Icon Media Holdings is currently generating about 0.03 per unit of risk. If you would invest  0.02  in FUNR on September 13, 2024 and sell it today you would earn a total of  0.02  from holding FUNR or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

FUNR  vs.  Icon Media Holdings

FUNR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FUNR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, FUNR reported solid returns over the last few months and may actually be approaching a breakup point.

Icon Media Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Media Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Icon Media displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FUNR and Icon Media

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

The idea behind FUNR and Icon Media Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.