Correlation Between Ishares Municipal and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal 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 Ishares Municipal and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Icon Financial Fund, you can compare the effects of market volatilities on Ishares Municipal 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 Ishares Municipal with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Icon Financial.
Diversification Opportunities for Ishares Municipal and Icon Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ishares and Icon is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Ishares Municipal 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 Ishares Municipal Bond 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 Ishares Municipal i.e., Ishares Municipal and Icon Financial go up and down completely randomly.
Pair Corralation between Ishares Municipal and Icon Financial
Assuming the 90 days horizon Ishares Municipal Bond is expected to generate 0.21 times more return on investment than Icon Financial. However, Ishares Municipal Bond is 4.78 times less risky than Icon Financial. It trades about 0.07 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 1,047 in Ishares Municipal Bond on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Ishares Municipal Bond or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Icon Financial Fund
Performance |
| Timeline |
| Ishares Municipal Bond |
| Icon Financial |
Ishares Municipal and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Icon Financial
The main advantage of trading using opposite Ishares Municipal and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal 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.| Ishares Municipal vs. Blackrock California Municipal | Ishares Municipal vs. Blackrock Balanced Capital | Ishares Municipal vs. Blackrock Eurofund Class | Ishares Municipal vs. Blackrock Funds |
| Icon Financial vs. Inverse Government Long | Icon Financial vs. Dws Government Money | Icon Financial vs. Prudential Government Income | Icon Financial vs. Government Securities 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |