Correlation Between Icon Financial and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Icon Financial and The Arbitrage 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 The Arbitrage 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 The Arbitrage Event Driven, you can compare the effects of market volatilities on Icon Financial and The Arbitrage 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 The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and The Arbitrage.
Diversification Opportunities for Icon Financial and The Arbitrage
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and The is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and The Arbitrage Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Event 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 The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Event has no effect on the direction of Icon Financial i.e., Icon Financial and The Arbitrage go up and down completely randomly.
Pair Corralation between Icon Financial and The Arbitrage
Assuming the 90 days horizon Icon Financial Fund is expected to generate 4.33 times more return on investment than The Arbitrage. However, Icon Financial is 4.33 times more volatile than The Arbitrage Event Driven. It trades about 0.27 of its potential returns per unit of risk. The Arbitrage Event Driven is currently generating about 0.23 per unit of risk. If you would invest 933.00 in Icon Financial Fund on November 10, 2024 and sell it today you would earn a total of 42.00 from holding Icon Financial Fund or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Icon Financial Fund vs. The Arbitrage Event Driven
Performance |
| Timeline |
| Icon Financial |
| Arbitrage Event |
Icon Financial and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and The Arbitrage
The main advantage of trading using opposite Icon Financial and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.| Icon Financial vs. Artisan Select Equity | Icon Financial vs. Old Westbury Fixed | Icon Financial vs. T Rowe Price | Icon Financial vs. Transamerica International Equity |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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