Correlation Between Icon Financial and Columbia Small
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Columbia Small 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 Columbia Small 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 Columbia Small Cap, you can compare the effects of market volatilities on Icon Financial and Columbia Small 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 Columbia Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Columbia Small.
Diversification Opportunities for Icon Financial and Columbia Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Icon and Columbia is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap 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 Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Icon Financial i.e., Icon Financial and Columbia Small go up and down completely randomly.
Pair Corralation between Icon Financial and Columbia Small
Assuming the 90 days horizon Icon Financial Fund is expected to generate 0.72 times more return on investment than Columbia Small. However, Icon Financial Fund is 1.39 times less risky than Columbia Small. It trades about 0.06 of its potential returns per unit of risk. Columbia Small Cap is currently generating about 0.03 per unit of risk. If you would invest 906.00 in Icon Financial Fund on August 30, 2024 and sell it today you would earn a total of 247.00 from holding Icon Financial Fund or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Columbia Small Cap
Performance |
| Timeline |
| Icon Financial |
| Columbia Small Cap |
Icon Financial and Columbia Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Columbia Small
The main advantage of trading using opposite Icon Financial and Columbia Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Columbia Small 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 Columbia Small will offset losses from the drop in Columbia Small's long position.| Icon Financial vs. HUMANA INC | Icon Financial vs. Aquagold International | Icon Financial vs. Barloworld Ltd ADR | Icon Financial vs. Morningstar Unconstrained Allocation |
| Columbia Small vs. Blrc Sgy Mnp | Columbia Small vs. Maryland Tax Free Bond | Columbia Small vs. Versatile Bond Portfolio | Columbia Small vs. T Rowe Price |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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