Correlation Between Icon Natural and Green Century
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Green Century 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 Green Century 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 Green Century Equity, you can compare the effects of market volatilities on Icon Natural and Green Century 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 Green Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Green Century.
Diversification Opportunities for Icon Natural and Green Century
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Icon and Green is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Green Century Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Century Equity 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 Green Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Century Equity has no effect on the direction of Icon Natural i.e., Icon Natural and Green Century go up and down completely randomly.
Pair Corralation between Icon Natural and Green Century
Assuming the 90 days horizon Icon Natural Resources is expected to generate 1.43 times more return on investment than Green Century. However, Icon Natural is 1.43 times more volatile than Green Century Equity. It trades about 0.05 of its potential returns per unit of risk. Green Century Equity is currently generating about 0.01 per unit of risk. If you would invest 1,790 in Icon Natural Resources on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Icon Natural Resources or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Green Century Equity
Performance |
| Timeline |
| Icon Natural Resources |
| Green Century Equity |
Icon Natural and Green Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Green Century
The main advantage of trading using opposite Icon Natural and Green Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Green Century 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 Green Century will offset losses from the drop in Green Century'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 |
| Green Century vs. Alliancebernstein Bond | Green Century vs. California Bond Fund | Green Century vs. T Rowe Price | Green Century vs. Versatile Bond Portfolio |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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