Correlation Between Icon Natural and Ivy Energy
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Ivy Energy 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 Energy 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 Energy Fund, you can compare the effects of market volatilities on Icon Natural and Ivy Energy 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 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Ivy Energy.
Diversification Opportunities for Icon Natural and Ivy Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icon and Ivy is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Ivy Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Energy Fund 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Energy Fund has no effect on the direction of Icon Natural i.e., Icon Natural and Ivy Energy go up and down completely randomly.
Pair Corralation between Icon Natural and Ivy Energy
Assuming the 90 days horizon Icon Natural is expected to generate 1.23 times less return on investment than Ivy Energy. In addition to that, Icon Natural is 1.35 times more volatile than Ivy Energy Fund. It trades about 0.02 of its total potential returns per unit of risk. Ivy Energy Fund is currently generating about 0.03 per unit of volatility. If you would invest 986.00 in Ivy Energy Fund on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Ivy Energy Fund or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Ivy Energy Fund
Performance |
| Timeline |
| Icon Natural Resources |
| Ivy Energy Fund |
Icon Natural and Ivy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Ivy Energy
The main advantage of trading using opposite Icon Natural and Ivy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Ivy Energy 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 Energy will offset losses from the drop in Ivy Energy'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 Energy vs. Touchstone Small Cap | Ivy Energy vs. The Hartford Small | Ivy Energy vs. Kinetics Small Cap | Ivy Energy vs. Small Midcap Dividend 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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