Correlation Between Icon Natural and Allianzgi Technology
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Allianzgi Technology 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 Allianzgi Technology 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 Allianzgi Technology Fund, you can compare the effects of market volatilities on Icon Natural and Allianzgi Technology 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 Allianzgi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Allianzgi Technology.
Diversification Opportunities for Icon Natural and Allianzgi Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Allianzgi is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Technology 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 Allianzgi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Technology has no effect on the direction of Icon Natural i.e., Icon Natural and Allianzgi Technology go up and down completely randomly.
Pair Corralation between Icon Natural and Allianzgi Technology
Assuming the 90 days horizon Icon Natural Resources is expected to under-perform the Allianzgi Technology. But the mutual fund apears to be less risky and, when comparing its historical volatility, Icon Natural Resources is 1.4 times less risky than Allianzgi Technology. The mutual fund trades about -0.28 of its potential returns per unit of risk. The Allianzgi Technology Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,207 in Allianzgi Technology Fund on September 22, 2024 and sell it today you would earn a total of 175.00 from holding Allianzgi Technology Fund or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Natural Resources vs. Allianzgi Technology Fund
Performance |
| Timeline |
| Icon Natural Resources |
| Allianzgi Technology |
Icon Natural and Allianzgi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Allianzgi Technology
The main advantage of trading using opposite Icon Natural and Allianzgi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Allianzgi Technology 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 Allianzgi Technology will offset losses from the drop in Allianzgi Technology's long position.| Icon Natural vs. Icon Bond Fund | Icon Natural vs. Icon Bond Fund | Icon Natural vs. Icon Longshort Fund | Icon Natural vs. Icon Longshort Fund |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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