Correlation Between Icon Natural and Ftfa-franklin Templeton
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Ftfa-franklin Templeton 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 Icon Natural and Ftfa-franklin Templeton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Natural Resources and Ftfa Franklin Templeton Growth, you can compare the effects of market volatilities on Icon Natural and Ftfa-franklin Templeton 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 Icon Natural with a short position of Ftfa-franklin Templeton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Ftfa-franklin Templeton.
Diversification Opportunities for Icon Natural and Ftfa-franklin Templeton
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Ftfa-franklin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Ftfa Franklin Templeton Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftfa Franklin Templeton and Icon Natural 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 Icon Natural Resources are associated (or correlated) with Ftfa-franklin Templeton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftfa Franklin Templeton has no effect on the direction of Icon Natural i.e., Icon Natural and Ftfa-franklin Templeton go up and down completely randomly.
Pair Corralation between Icon Natural and Ftfa-franklin Templeton
Assuming the 90 days horizon Icon Natural Resources is expected to under-perform the Ftfa-franklin Templeton. In addition to that, Icon Natural is 1.64 times more volatile than Ftfa Franklin Templeton Growth. It trades about -0.49 of its total potential returns per unit of risk. Ftfa Franklin Templeton Growth is currently generating about -0.24 per unit of volatility. If you would invest 2,103 in Ftfa Franklin Templeton Growth on December 11, 2024 and sell it today you would lose (84.00) from holding Ftfa Franklin Templeton Growth or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Ftfa Franklin Templeton Growth
Performance |
| Timeline |
| Icon Natural Resources |
| Ftfa Franklin Templeton |
Icon Natural and Ftfa-franklin Templeton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Ftfa-franklin Templeton
The main advantage of trading using opposite Icon Natural and Ftfa-franklin Templeton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Ftfa-franklin Templeton 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 Ftfa-franklin Templeton will offset losses from the drop in Ftfa-franklin Templeton's long position.| Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Icon Information Technology |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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