Correlation Between Icon Financial and American Funds
Can any of the company-specific risk be diversified away by investing in both Icon Financial and American Funds 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 Financial and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Financial Fund and American Funds 2035, you can compare the effects of market volatilities on Icon Financial and American Funds 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 Financial with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and American Funds.
Diversification Opportunities for Icon Financial and American Funds
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and AMERICAN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and American Funds 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2035 and Icon Financial 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 Financial Fund are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2035 has no effect on the direction of Icon Financial i.e., Icon Financial and American Funds go up and down completely randomly.
Pair Corralation between Icon Financial and American Funds
Assuming the 90 days horizon Icon Financial is expected to generate 8.38 times less return on investment than American Funds. In addition to that, Icon Financial is 2.43 times more volatile than American Funds 2035. It trades about 0.01 of its total potential returns per unit of risk. American Funds 2035 is currently generating about 0.14 per unit of volatility. If you would invest 1,693 in American Funds 2035 on September 4, 2024 and sell it today you would earn a total of 327.00 from holding American Funds 2035 or generate 19.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. American Funds 2035
Performance |
| Timeline |
| Icon Financial |
| American Funds 2035 |
Icon Financial and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and American Funds
The main advantage of trading using opposite Icon Financial and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Icon Financial vs. Limited Term Tax | Icon Financial vs. Bbh Intermediate Municipal | Icon Financial vs. Alliancebernstein National Municipal | Icon Financial vs. Gamco Global Telecommunications |
| American Funds vs. Transamerica Financial Life | American Funds vs. Icon Financial Fund | American Funds vs. Vanguard Financials Index | American Funds vs. Prudential Financial Services |
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.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |