Correlation Between High Yield and Icon Financial
Can any of the company-specific risk be diversified away by investing in both High Yield and Icon Financial 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 High Yield and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund R6 and Icon Financial Fund, you can compare the effects of market volatilities on High Yield and Icon Financial 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 High Yield with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Icon Financial.
Diversification Opportunities for High Yield and Icon Financial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between High and Icon is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund R6 and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and High Yield 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 High Yield Fund R6 are associated (or correlated) with Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of High Yield i.e., High Yield and Icon Financial go up and down completely randomly.
Pair Corralation between High Yield and Icon Financial
Assuming the 90 days horizon High Yield Fund R6 is expected to generate 0.22 times more return on investment than Icon Financial. However, High Yield Fund R6 is 4.59 times less risky than Icon Financial. It trades about 0.13 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.01 per unit of risk. If you would invest 456.00 in High Yield Fund R6 on September 12, 2024 and sell it today you would earn a total of 57.00 from holding High Yield Fund R6 or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
High Yield Fund R6 vs. Icon Financial Fund
Performance |
| Timeline |
| High Yield Fund |
| Icon Financial |
High Yield and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Icon Financial
The main advantage of trading using opposite High Yield and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Icon Financial 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 Financial will offset losses from the drop in Icon Financial's long position.| High Yield vs. SCOR PK | High Yield vs. Morningstar Unconstrained Allocation | High Yield vs. Via Renewables | High Yield vs. Bondbloxx ETF Trust |
| Icon Financial vs. T Rowe Price | Icon Financial vs. Rational Defensive Growth | Icon Financial vs. Franklin Growth Opportunities | Icon Financial vs. Smallcap Growth 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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