Correlation Between Icon Natural and Ivy Natural
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Ivy Natural 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 Ivy Natural 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 Ivy Natural Resources, you can compare the effects of market volatilities on Icon Natural and Ivy Natural 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 Ivy Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Ivy Natural.
Diversification Opportunities for Icon Natural and Ivy Natural
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Ivy is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Ivy Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Natural Resources 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 Ivy Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Natural Resources has no effect on the direction of Icon Natural i.e., Icon Natural and Ivy Natural go up and down completely randomly.
Pair Corralation between Icon Natural and Ivy Natural
Assuming the 90 days horizon Icon Natural Resources is expected to generate 0.97 times more return on investment than Ivy Natural. However, Icon Natural Resources is 1.03 times less risky than Ivy Natural. It trades about 0.03 of its potential returns per unit of risk. Ivy Natural Resources is currently generating about 0.02 per unit of risk. If you would invest 1,602 in Icon Natural Resources on September 4, 2024 and sell it today you would earn a total of 233.00 from holding Icon Natural Resources or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Ivy Natural Resources
Performance |
| Timeline |
| Icon Natural Resources |
| Ivy Natural Resources |
Icon Natural and Ivy Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Ivy Natural
The main advantage of trading using opposite Icon Natural and Ivy Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Ivy Natural 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 Ivy Natural will offset losses from the drop in Ivy Natural'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 |
| Ivy Natural vs. Optimum Small Mid Cap | Ivy Natural vs. Optimum Small Mid Cap | Ivy Natural vs. Ivy Apollo Multi Asset | Ivy Natural vs. Optimum Fixed Income |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |