Correlation Between Icon Financial and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Sterling Capital 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 Sterling Capital 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 Sterling Capital North, you can compare the effects of market volatilities on Icon Financial and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Sterling Capital.
Diversification Opportunities for Icon Financial and Sterling Capital
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Sterling is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Sterling Capital North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital North 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital North has no effect on the direction of Icon Financial i.e., Icon Financial and Sterling Capital go up and down completely randomly.
Pair Corralation between Icon Financial and Sterling Capital
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Sterling Capital. In addition to that, Icon Financial is 15.8 times more volatile than Sterling Capital North. It trades about -0.07 of its total potential returns per unit of risk. Sterling Capital North is currently generating about 0.18 per unit of volatility. If you would invest 1,006 in Sterling Capital North on September 4, 2024 and sell it today you would earn a total of 8.00 from holding Sterling Capital North or generate 0.8% 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. Sterling Capital North
Performance |
| Timeline |
| Icon Financial |
| Sterling Capital North |
Icon Financial and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Sterling Capital
The main advantage of trading using opposite Icon Financial and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Icon Financial vs. Limited Term Tax | Icon Financial vs. Bbh Intermediate Municipal | Icon Financial vs. Alliancebernstein National Municipal | Icon Financial vs. Gamco Global Telecommunications |
| Sterling Capital vs. Ab Global Risk | Sterling Capital vs. Scharf Global Opportunity | Sterling Capital vs. Franklin Mutual Global | Sterling Capital vs. Mirova Global Green |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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