Correlation Between Icon Natural and Real Return
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Real Return 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 Real Return 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 Real Return Fund, you can compare the effects of market volatilities on Icon Natural and Real Return 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 Real Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Real Return.
Diversification Opportunities for Icon Natural and Real Return
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Real is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Real Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return 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 Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Fund has no effect on the direction of Icon Natural i.e., Icon Natural and Real Return go up and down completely randomly.
Pair Corralation between Icon Natural and Real Return
Assuming the 90 days horizon Icon Natural Resources is expected to generate 3.25 times more return on investment than Real Return. However, Icon Natural is 3.25 times more volatile than Real Return Fund. It trades about 0.03 of its potential returns per unit of risk. Real Return Fund is currently generating about 0.05 per unit of risk. If you would invest 1,632 in Icon Natural Resources on September 1, 2024 and sell it today you would earn a total of 215.00 from holding Icon Natural Resources or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Icon Natural Resources vs. Real Return Fund
Performance |
| Timeline |
| Icon Natural Resources |
| Real Return Fund |
Icon Natural and Real Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Real Return
The main advantage of trading using opposite Icon Natural and Real Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Real Return 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 Real Return will offset losses from the drop in Real Return'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 |
| Real Return vs. Artisan Emerging Markets | Real Return vs. Transamerica Emerging Markets | Real Return vs. Origin Emerging Markets | Real Return vs. Ab All Market |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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