Correlation Between Icon Natural and Thrivent Natural
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Thrivent Natural 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 Thrivent Natural 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 Thrivent Natural Resources, you can compare the effects of market volatilities on Icon Natural and Thrivent Natural 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 Thrivent Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Thrivent Natural.
Diversification Opportunities for Icon Natural and Thrivent Natural
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Thrivent is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res 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 Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Icon Natural i.e., Icon Natural and Thrivent Natural go up and down completely randomly.
Pair Corralation between Icon Natural and Thrivent Natural
Assuming the 90 days horizon Icon Natural Resources is expected to generate 12.64 times more return on investment than Thrivent Natural. However, Icon Natural is 12.64 times more volatile than Thrivent Natural Resources. It trades about 0.07 of its potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.25 per unit of risk. If you would invest 1,509 in Icon Natural Resources on September 12, 2024 and sell it today you would earn a total of 296.00 from holding Icon Natural Resources or generate 19.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Icon Natural Resources vs. Thrivent Natural Resources
Performance |
| Timeline |
| Icon Natural Resources |
| Thrivent Natural Res |
Icon Natural and Thrivent Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Thrivent Natural
The main advantage of trading using opposite Icon Natural and Thrivent Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Thrivent Natural 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 Thrivent Natural will offset losses from the drop in Thrivent Natural'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 |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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