Correlation Between Icon Financial and Ab Select
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Ab Select 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 Select 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 Select Equity, you can compare the effects of market volatilities on Icon Financial and Ab Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Ab Select.
Diversification Opportunities for Icon Financial and Ab Select
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and AUUIX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Icon Financial i.e., Icon Financial and Ab Select go up and down completely randomly.
Pair Corralation between Icon Financial and Ab Select
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Ab Select. In addition to that, Icon Financial is 4.6 times more volatile than Ab Select Equity. It trades about -0.07 of its total potential returns per unit of risk. Ab Select Equity is currently generating about 0.35 per unit of volatility. If you would invest 2,283 in Ab Select Equity on September 1, 2024 and sell it today you would earn a total of 127.00 from holding Ab Select Equity or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Ab Select Equity
Performance |
| Timeline |
| Icon Financial |
| Ab Select Equity |
Icon Financial and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Ab Select
The main advantage of trading using opposite Icon Financial and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Ab Select 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 Select will offset losses from the drop in Ab Select'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 |
| Ab Select vs. Fidelity Advisor Energy | Ab Select vs. Gamco Natural Resources | Ab Select vs. Hennessy Bp Energy | Ab Select vs. Alpsalerian Energy Infrastructure |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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