Correlation Between Cognios Market and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Cognios Market 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 Cognios Market and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognios Market Neutral and Icon Financial Fund, you can compare the effects of market volatilities on Cognios Market 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 Cognios Market with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognios Market and Icon Financial.
Diversification Opportunities for Cognios Market and Icon Financial
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cognios and Icon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cognios Market Neutral and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Cognios Market 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 Cognios Market Neutral 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 Cognios Market i.e., Cognios Market and Icon Financial go up and down completely randomly.
Pair Corralation between Cognios Market and Icon Financial
Assuming the 90 days horizon Cognios Market Neutral is expected to under-perform the Icon Financial. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cognios Market Neutral is 3.64 times less risky than Icon Financial. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Icon Financial Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 954.00 in Icon Financial Fund on November 5, 2024 and sell it today you would earn a total of 10.00 from holding Icon Financial Fund or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognios Market Neutral vs. Icon Financial Fund
Performance |
| Timeline |
| Cognios Market Neutral |
| Icon Financial |
Cognios Market and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognios Market and Icon Financial
The main advantage of trading using opposite Cognios Market and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognios Market 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.| Cognios Market vs. Ab Bond Inflation | Cognios Market vs. Gmo Emerging Ntry | Cognios Market vs. Ab Bond Inflation | Cognios Market vs. Rbc Bluebay Emerging |
| Icon Financial vs. Wabmsx | Icon Financial vs. Wmcanx | Icon Financial vs. Fwnhtx | Icon Financial vs. Rbb 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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