Correlation Between Icon Financial and Federated Prudent
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Federated Prudent 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 Federated Prudent 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 Federated Prudent Bear, you can compare the effects of market volatilities on Icon Financial and Federated Prudent 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 Federated Prudent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Federated Prudent.
Diversification Opportunities for Icon Financial and Federated Prudent
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Icon and Federated is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Federated Prudent Bear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Prudent Bear 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 Federated Prudent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Prudent Bear has no effect on the direction of Icon Financial i.e., Icon Financial and Federated Prudent go up and down completely randomly.
Pair Corralation between Icon Financial and Federated Prudent
Assuming the 90 days horizon Icon Financial Fund is expected to generate 1.36 times more return on investment than Federated Prudent. However, Icon Financial is 1.36 times more volatile than Federated Prudent Bear. It trades about 0.02 of its potential returns per unit of risk. Federated Prudent Bear is currently generating about -0.07 per unit of risk. If you would invest 911.00 in Icon Financial Fund on September 4, 2024 and sell it today you would earn a total of 79.00 from holding Icon Financial Fund or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Federated Prudent Bear
Performance |
| Timeline |
| Icon Financial |
| Federated Prudent Bear |
Icon Financial and Federated Prudent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Federated Prudent
The main advantage of trading using opposite Icon Financial and Federated Prudent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Federated Prudent 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 Federated Prudent will offset losses from the drop in Federated Prudent'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 |
| Federated Prudent vs. Federated Emerging Market | Federated Prudent vs. Federated Mdt All | Federated Prudent vs. Federated Mdt Balanced | Federated Prudent vs. Federated Global Allocation |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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