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 Fund, 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
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and The is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Arbitrage 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 The Arbitrage 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 is expected to generate 1.48 times less return on investment than The Arbitrage. In addition to that, Icon Financial is 5.62 times more volatile than The Arbitrage Fund. It trades about 0.01 of its total potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.07 per unit of volatility. If you would invest 1,248 in The Arbitrage Fund on September 1, 2024 and sell it today you would earn a total of 52.00 from holding The Arbitrage Fund or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Icon Financial Fund vs. The Arbitrage Fund
Performance |
| Timeline |
| Icon Financial |
| The Arbitrage |
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. Nuveen Minnesota Municipal | Icon Financial vs. Bbh Intermediate Municipal | Icon Financial vs. Blrc Sgy Mnp | Icon Financial vs. T Rowe Price |
| The Arbitrage vs. Qs Large Cap | The Arbitrage vs. Fidelity Series 1000 | The Arbitrage vs. Touchstone Large Cap | The Arbitrage vs. M Large Cap |
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 Stocks Directory module to find actively traded stocks across global markets.
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