Correlation Between Icon Natural and Franklin North
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Franklin North 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 Franklin North 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 Franklin North Carolina, you can compare the effects of market volatilities on Icon Natural and Franklin North 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 Franklin North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Franklin North.
Diversification Opportunities for Icon Natural and Franklin North
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icon and Franklin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Franklin North Carolina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin North Carolina 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 Franklin North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin North Carolina has no effect on the direction of Icon Natural i.e., Icon Natural and Franklin North go up and down completely randomly.
Pair Corralation between Icon Natural and Franklin North
Assuming the 90 days horizon Icon Natural Resources is expected to generate 6.4 times more return on investment than Franklin North. However, Icon Natural is 6.4 times more volatile than Franklin North Carolina. It trades about 0.09 of its potential returns per unit of risk. Franklin North Carolina is currently generating about 0.19 per unit of risk. If you would invest 1,782 in Icon Natural Resources on September 1, 2024 and sell it today you would earn a total of 65.00 from holding Icon Natural Resources or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Natural Resources vs. Franklin North Carolina
Performance |
| Timeline |
| Icon Natural Resources |
| Franklin North Carolina |
Icon Natural and Franklin North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Franklin North
The main advantage of trading using opposite Icon Natural and Franklin North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Franklin North 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 Franklin North will offset losses from the drop in Franklin North'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 |
| Franklin North vs. Live Oak Health | Franklin North vs. Alphacentric Lifesci Healthcare | Franklin North vs. Invesco Global Health | Franklin North vs. Lord Abbett Health |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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