Correlation Between Icon Natural and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Invesco Senior 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 Invesco Senior 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 Invesco Senior Loan, you can compare the effects of market volatilities on Icon Natural and Invesco Senior 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 Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Invesco Senior.
Diversification Opportunities for Icon Natural and Invesco Senior
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Invesco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Invesco Senior Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Loan 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 Invesco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Loan has no effect on the direction of Icon Natural i.e., Icon Natural and Invesco Senior go up and down completely randomly.
Pair Corralation between Icon Natural and Invesco Senior
Assuming the 90 days horizon Icon Natural Resources is expected to generate 16.54 times more return on investment than Invesco Senior. However, Icon Natural is 16.54 times more volatile than Invesco Senior Loan. It trades about 0.04 of its potential returns per unit of risk. Invesco Senior Loan is currently generating about 0.0 per unit of risk. If you would invest 1,800 in Icon Natural Resources on September 5, 2024 and sell it today you would earn a total of 22.00 from holding Icon Natural Resources or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Natural Resources vs. Invesco Senior Loan
Performance |
| Timeline |
| Icon Natural Resources |
| Invesco Senior Loan |
Icon Natural and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Invesco Senior
The main advantage of trading using opposite Icon Natural and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Invesco Senior 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 Invesco Senior will offset losses from the drop in Invesco Senior's long position.| Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Huber Capital Small |
| Invesco Senior vs. Energy Basic Materials | Invesco Senior vs. Icon Natural Resources | Invesco Senior vs. World Energy Fund | Invesco Senior vs. Energy Basic Materials |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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