Correlation Between Icon Energy and Seanergy Maritime

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

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

Diversification Opportunities for Icon Energy and Seanergy Maritime

-0.36

Correlation Coefficient

Icon Energy  Seanergy Maritime

Very good diversification

The 3 months correlation between Icon and Seanergy is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Icon Energy Corp and Seanergy Maritime Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seanergy Maritime and Icon Energy 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 Energy Corp are associated (or correlated) with Seanergy Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seanergy Maritime has no effect on the direction of Icon Energy i.e., Icon Energy and Seanergy Maritime go up and down completely randomly.

Pair Corralation between Icon Energy and Seanergy Maritime

Given the investment horizon of 90 days Icon Energy Corp is expected to generate 2.07 times more return on investment than Seanergy Maritime. However, Icon Energy is 2.07 times more volatile than Seanergy Maritime Holdings. It trades about 0.08 of its potential returns per unit of risk. Seanergy Maritime Holdings is currently generating about -0.18 per unit of risk. If you would invest  236.00  in Icon Energy Corp on September 3, 2024 and sell it today you would earn a total of  48.00  from holding Icon Energy Corp or generate 20.34% return on investment over 90 days.

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

Icon Energy Corp  vs.  Seanergy Maritime Holdings

Icon Energy Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Energy Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Icon Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Seanergy Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seanergy Maritime Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Icon Energy and Seanergy Maritime

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

The idea behind Icon Energy Corp and Seanergy Maritime 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.