Correlation Between Ab Bond and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Ab Bond 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 Ab Bond and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Icon Financial Fund, you can compare the effects of market volatilities on Ab Bond 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 Ab Bond with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Icon Financial.
Diversification Opportunities for Ab Bond and Icon Financial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ANBIX and Icon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Ab Bond 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 Ab Bond Inflation 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 Ab Bond i.e., Ab Bond and Icon Financial go up and down completely randomly.
Pair Corralation between Ab Bond and Icon Financial
Assuming the 90 days horizon Ab Bond is expected to generate 1.83 times less return on investment than Icon Financial. But when comparing it to its historical volatility, Ab Bond Inflation is 5.56 times less risky than Icon Financial. It trades about 0.36 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 954.00 in Icon Financial Fund on November 7, 2024 and sell it today you would earn a total of 20.00 from holding Icon Financial Fund or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Icon Financial Fund
Performance |
| Timeline |
| Ab Bond Inflation |
| Icon Financial |
Ab Bond and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Icon Financial
The main advantage of trading using opposite Ab Bond and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond 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.The idea behind Ab Bond Inflation and Icon Financial Fund 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.| Icon Financial vs. City National Rochdale | Icon Financial vs. Prudential High Yield | Icon Financial vs. Payden High Income | Icon Financial vs. Gmo High Yield |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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