Correlation Between Icon Financial and Heritage Fund
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Heritage Fund 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 Heritage Fund 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 Heritage Fund A, you can compare the effects of market volatilities on Icon Financial and Heritage Fund 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 Heritage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Heritage Fund.
Diversification Opportunities for Icon Financial and Heritage Fund
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Heritage is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Heritage Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Fund A 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 Heritage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Fund A has no effect on the direction of Icon Financial i.e., Icon Financial and Heritage Fund go up and down completely randomly.
Pair Corralation between Icon Financial and Heritage Fund
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Heritage Fund. In addition to that, Icon Financial is 1.51 times more volatile than Heritage Fund A. It trades about -0.03 of its total potential returns per unit of risk. Heritage Fund A is currently generating about 0.16 per unit of volatility. If you would invest 1,990 in Heritage Fund A on September 1, 2024 and sell it today you would earn a total of 459.00 from holding Heritage Fund A or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Icon Financial Fund vs. Heritage Fund A
Performance |
| Timeline |
| Icon Financial |
| Heritage Fund A |
Icon Financial and Heritage Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Heritage Fund
The main advantage of trading using opposite Icon Financial and Heritage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Heritage Fund 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 Heritage Fund will offset losses from the drop in Heritage Fund'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 |
| Heritage Fund vs. Growth Fund Investor | Heritage Fund vs. Select Fund Investor | Heritage Fund vs. Emerging Markets Fund | Heritage Fund vs. Ultra Fund Investor |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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