Correlation Between Aquagold International and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Aquagold International 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 Aquagold International and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Icon Financial Fund, you can compare the effects of market volatilities on Aquagold International 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 Aquagold International with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Icon Financial.
Diversification Opportunities for Aquagold International and Icon Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aquagold and Icon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and Icon Financial go up and down completely randomly.
Pair Corralation between Aquagold International and Icon Financial
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Icon Financial. In addition to that, Aquagold International is 13.32 times more volatile than Icon Financial Fund. It trades about -0.22 of its total potential returns per unit of risk. Icon Financial Fund is currently generating about -0.15 per unit of volatility. If you would invest 989.00 in Icon Financial Fund on November 27, 2024 and sell it today you would lose (25.00) from holding Icon Financial Fund or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aquagold International vs. Icon Financial Fund
Performance |
| Timeline |
| Aquagold International |
| Icon Financial |
Aquagold International and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Icon Financial
The main advantage of trading using opposite Aquagold International and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Icon Financial vs. T Rowe Price | Icon Financial vs. Touchstone Sands Capital | Icon Financial vs. Rational Defensive Growth | Icon Financial vs. L Abbett Growth |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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