Correlation Between Guidemark Large and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Guidemark Large 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 Guidemark Large and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Icon Financial Fund, you can compare the effects of market volatilities on Guidemark Large 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 Guidemark Large with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Icon Financial.
Diversification Opportunities for Guidemark Large and Icon Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guidemark and Icon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Guidemark Large 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 Guidemark Large Cap 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 Guidemark Large i.e., Guidemark Large and Icon Financial go up and down completely randomly.
Pair Corralation between Guidemark Large and Icon Financial
Assuming the 90 days horizon Guidemark Large Cap is expected to generate 0.74 times more return on investment than Icon Financial. However, Guidemark Large Cap is 1.35 times less risky than Icon Financial. It trades about 0.06 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.02 per unit of risk. If you would invest 953.00 in Guidemark Large Cap on September 13, 2024 and sell it today you would earn a total of 234.00 from holding Guidemark Large Cap or generate 24.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. Icon Financial Fund
Performance |
| Timeline |
| Guidemark Large Cap |
| Icon Financial |
Guidemark Large and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and Icon Financial
The main advantage of trading using opposite Guidemark Large and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large 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.| Guidemark Large vs. Barings Emerging Markets | Guidemark Large vs. Ep Emerging Markets | Guidemark Large vs. Franklin Emerging Market | Guidemark Large vs. Siit Emerging Markets |
| Icon Financial vs. Alternative Asset Allocation | Icon Financial vs. Fm Investments Large | Icon Financial vs. Washington Mutual Investors | Icon Financial vs. Guidemark Large Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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