Correlation Between Icon Financial and Ab Global
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Ab Global 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 Ab Global 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 Ab Global Bond, you can compare the effects of market volatilities on Icon Financial and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Ab Global.
Diversification Opportunities for Icon Financial and Ab Global
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Icon and ANAGX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Icon Financial i.e., Icon Financial and Ab Global go up and down completely randomly.
Pair Corralation between Icon Financial and Ab Global
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Ab Global. In addition to that, Icon Financial is 4.9 times more volatile than Ab Global Bond. It trades about -0.18 of its total potential returns per unit of risk. Ab Global Bond is currently generating about -0.48 per unit of volatility. If you would invest 697.00 in Ab Global Bond on October 9, 2024 and sell it today you would lose (12.00) from holding Ab Global Bond or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Ab Global Bond
Performance |
| Timeline |
| Icon Financial |
| Ab Global Bond |
Icon Financial and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Ab Global
The main advantage of trading using opposite Icon Financial and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Icon Financial vs. Mesirow Financial High | Icon Financial vs. Inverse High Yield | Icon Financial vs. Msift High Yield | Icon Financial vs. Americafirst Monthly Risk On |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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