Correlation Between Icon Natural and Stringer Growth
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Stringer Growth 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 Stringer Growth 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 Stringer Growth Fund, you can compare the effects of market volatilities on Icon Natural and Stringer Growth 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 Stringer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Stringer Growth.
Diversification Opportunities for Icon Natural and Stringer Growth
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Stringer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth 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 Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Icon Natural i.e., Icon Natural and Stringer Growth go up and down completely randomly.
Pair Corralation between Icon Natural and Stringer Growth
Assuming the 90 days horizon Icon Natural Resources is expected to generate 2.91 times more return on investment than Stringer Growth. However, Icon Natural is 2.91 times more volatile than Stringer Growth Fund. It trades about 0.05 of its potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.11 per unit of risk. If you would invest 1,778 in Icon Natural Resources on September 2, 2024 and sell it today you would earn a total of 69.00 from holding Icon Natural Resources or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Stringer Growth Fund
Performance |
| Timeline |
| Icon Natural Resources |
| Stringer Growth |
Icon Natural and Stringer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Stringer Growth
The main advantage of trading using opposite Icon Natural and Stringer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Stringer Growth 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 Stringer Growth will offset losses from the drop in Stringer Growth'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 |
| Stringer Growth vs. Wasatch Global Opportunities | Stringer Growth vs. Us Global Investors | Stringer Growth vs. T Rowe Price | Stringer Growth vs. Us Global Leaders |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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