Correlation Between Icon Natural and Nasdaq-100 Fund
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Nasdaq-100 Fund 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 Nasdaq-100 Fund 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 Nasdaq 100 Fund Investor, you can compare the effects of market volatilities on Icon Natural and Nasdaq-100 Fund 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 Nasdaq-100 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Nasdaq-100 Fund.
Diversification Opportunities for Icon Natural and Nasdaq-100 Fund
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Icon and NASDAQ-100 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Nasdaq 100 Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 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 Nasdaq-100 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Icon Natural i.e., Icon Natural and Nasdaq-100 Fund go up and down completely randomly.
Pair Corralation between Icon Natural and Nasdaq-100 Fund
Assuming the 90 days horizon Icon Natural is expected to generate 1.24 times less return on investment than Nasdaq-100 Fund. In addition to that, Icon Natural is 1.01 times more volatile than Nasdaq 100 Fund Investor. It trades about 0.08 of its total potential returns per unit of risk. Nasdaq 100 Fund Investor is currently generating about 0.1 per unit of volatility. If you would invest 6,732 in Nasdaq 100 Fund Investor on August 25, 2024 and sell it today you would earn a total of 1,938 from holding Nasdaq 100 Fund Investor or generate 28.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Nasdaq 100 Fund Investor
Performance |
| Timeline |
| Icon Natural Resources |
| Nasdaq 100 Fund |
Icon Natural and Nasdaq-100 Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Nasdaq-100 Fund
The main advantage of trading using opposite Icon Natural and Nasdaq-100 Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Nasdaq-100 Fund 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 Nasdaq-100 Fund will offset losses from the drop in Nasdaq-100 Fund'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 |
| Nasdaq-100 Fund vs. Alpsalerian Energy Infrastructure | Nasdaq-100 Fund vs. World Energy Fund | Nasdaq-100 Fund vs. Icon Natural Resources | Nasdaq-100 Fund vs. Hennessy Bp Energy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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