Correlation Between Icon Natural and Sit International
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Sit International 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 Sit International 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 Sit International Equity, you can compare the effects of market volatilities on Icon Natural and Sit International 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 Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Sit International.
Diversification Opportunities for Icon Natural and Sit International
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Sit is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity 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 Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of Icon Natural i.e., Icon Natural and Sit International go up and down completely randomly.
Pair Corralation between Icon Natural and Sit International
Assuming the 90 days horizon Icon Natural is expected to generate 1.43 times less return on investment than Sit International. In addition to that, Icon Natural is 1.45 times more volatile than Sit International Equity. It trades about 0.03 of its total potential returns per unit of risk. Sit International Equity is currently generating about 0.06 per unit of volatility. If you would invest 1,008 in Sit International Equity on September 3, 2024 and sell it today you would earn a total of 257.00 from holding Sit International Equity or generate 25.5% 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. Sit International Equity
Performance |
| Timeline |
| Icon Natural Resources |
| Sit International Equity |
Icon Natural and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Sit International
The main advantage of trading using opposite Icon Natural and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International'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 |
| Sit International vs. Sit Emerging Markets | Sit International vs. Sit Small Cap | Sit International vs. Sit Global Dividend | Sit International vs. Sit Global Dividend |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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