Correlation Between Icon Natural and Allianzgi Convertible
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Allianzgi Convertible 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 Allianzgi Convertible 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 Allianzgi Convertible Income, you can compare the effects of market volatilities on Icon Natural and Allianzgi Convertible 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 Allianzgi Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Allianzgi Convertible.
Diversification Opportunities for Icon Natural and Allianzgi Convertible
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Icon and Allianzgi is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible 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 Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Icon Natural i.e., Icon Natural and Allianzgi Convertible go up and down completely randomly.
Pair Corralation between Icon Natural and Allianzgi Convertible
Assuming the 90 days horizon Icon Natural is expected to generate 1.24 times less return on investment than Allianzgi Convertible. In addition to that, Icon Natural is 1.22 times more volatile than Allianzgi Convertible Income. It trades about 0.14 of its total potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.2 per unit of volatility. If you would invest 392.00 in Allianzgi Convertible Income on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Allianzgi Convertible Income or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Allianzgi Convertible Income
Performance |
| Timeline |
| Icon Natural Resources |
| Allianzgi Convertible |
Icon Natural and Allianzgi Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Allianzgi Convertible
The main advantage of trading using opposite Icon Natural and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Allianzgi Convertible 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 Allianzgi Convertible will offset losses from the drop in Allianzgi Convertible'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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