Correlation Between Equity Growth and Icon Information
Can any of the company-specific risk be diversified away by investing in both Equity Growth 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 Equity Growth and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Growth Fund and Icon Information Technology, you can compare the effects of market volatilities on Equity Growth 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 Equity Growth with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Icon Information.
Diversification Opportunities for Equity Growth and Icon Information
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equity and ICON is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Fund 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 Equity Growth 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 Equity Growth Fund 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 Equity Growth i.e., Equity Growth and Icon Information go up and down completely randomly.
Pair Corralation between Equity Growth and Icon Information
Assuming the 90 days horizon Equity Growth Fund is expected to generate 45.13 times more return on investment than Icon Information. However, Equity Growth is 45.13 times more volatile than Icon Information Technology. It trades about 0.04 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.02 per unit of risk. If you would invest 2,260 in Equity Growth Fund on October 13, 2024 and sell it today you would earn a total of 1,078 from holding Equity Growth Fund or generate 47.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Equity Growth Fund vs. Icon Information Technology
Performance |
| Timeline |
| Equity Growth |
| Icon Information Tec |
Equity Growth and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and Icon Information
The main advantage of trading using opposite Equity Growth and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth 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.| Equity Growth vs. Icon Information Technology | Equity Growth vs. Dreyfus Technology Growth | Equity Growth vs. Firsthand Technology Opportunities | Equity Growth vs. Science Technology Fund |
| Icon Information vs. Investec Emerging Markets | Icon Information vs. Calvert Developed Market | Icon Information vs. Lord Abbett Diversified | Icon Information vs. T Rowe Price |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |