Correlation Between Applied Finance and Icon Information
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Icon Information 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 Applied Finance and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Icon Information Technology, you can compare the effects of market volatilities on Applied Finance and Icon Information 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 Applied Finance with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Icon Information.
Diversification Opportunities for Applied Finance and Icon Information
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Applied and Icon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Applied Finance i.e., Applied Finance and Icon Information go up and down completely randomly.
Pair Corralation between Applied Finance and Icon Information
Assuming the 90 days horizon Applied Finance Explorer is expected to generate 0.88 times more return on investment than Icon Information. However, Applied Finance Explorer is 1.13 times less risky than Icon Information. It trades about -0.04 of its potential returns per unit of risk. Icon Information Technology is currently generating about -0.07 per unit of risk. If you would invest 2,182 in Applied Finance Explorer on November 30, 2024 and sell it today you would lose (33.00) from holding Applied Finance Explorer or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Finance Explorer vs. Icon Information Technology
Performance |
| Timeline |
| Applied Finance Explorer |
| Icon Information Tec |
Applied Finance and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Icon Information
The main advantage of trading using opposite Applied Finance and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Icon Information 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 Information will offset losses from the drop in Icon Information's long position.| Applied Finance vs. Putnam Global Health | Applied Finance vs. Live Oak Health | Applied Finance vs. Deutsche Health And | Applied Finance vs. Schwab Health Care |
| Icon Information vs. Crossmark Steward Equity | Icon Information vs. Federated Government Income | Icon Information vs. Ultra Short Fixed Income | Icon Information vs. Bbh Partner Fund |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |