Correlation Between Icon Natural and Integrity High
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Integrity High 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 Integrity High 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 Integrity High Income, you can compare the effects of market volatilities on Icon Natural and Integrity High 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 Integrity High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Integrity High.
Diversification Opportunities for Icon Natural and Integrity High
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Integrity is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Integrity High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrity High Income 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 Integrity High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrity High Income has no effect on the direction of Icon Natural i.e., Icon Natural and Integrity High go up and down completely randomly.
Pair Corralation between Icon Natural and Integrity High
Assuming the 90 days horizon Icon Natural Resources is expected to generate 5.05 times more return on investment than Integrity High. However, Icon Natural is 5.05 times more volatile than Integrity High Income. It trades about 0.06 of its potential returns per unit of risk. Integrity High Income is currently generating about 0.19 per unit of risk. If you would invest 1,555 in Icon Natural Resources on September 4, 2024 and sell it today you would earn a total of 280.00 from holding Icon Natural Resources or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Icon Natural Resources vs. Integrity High Income
Performance |
| Timeline |
| Icon Natural Resources |
| Integrity High Income |
Icon Natural and Integrity High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Integrity High
The main advantage of trading using opposite Icon Natural and Integrity High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Integrity High 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 Integrity High will offset losses from the drop in Integrity High'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 |
| Integrity High vs. Calvert Global Energy | Integrity High vs. Energy Basic Materials | Integrity High vs. Icon Natural Resources | Integrity High vs. Franklin Natural Resources |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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