Correlation Between Icon Financial and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Dreyfus Technology 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 Dreyfus Technology 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 Dreyfus Technology Growth, you can compare the effects of market volatilities on Icon Financial and Dreyfus Technology 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 Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Dreyfus Technology.
Diversification Opportunities for Icon Financial and Dreyfus Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Icon and Dreyfus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth 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 Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of Icon Financial i.e., Icon Financial and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Icon Financial and Dreyfus Technology
Assuming the 90 days horizon Icon Financial Fund is expected to generate 1.04 times more return on investment than Dreyfus Technology. However, Icon Financial is 1.04 times more volatile than Dreyfus Technology Growth. It trades about 0.2 of its potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.16 per unit of risk. If you would invest 1,091 in Icon Financial Fund on August 28, 2024 and sell it today you would earn a total of 61.00 from holding Icon Financial Fund or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Icon Financial |
| Dreyfus Technology Growth |
Icon Financial and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Dreyfus Technology
The main advantage of trading using opposite Icon Financial and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Dreyfus Technology 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 Dreyfus Technology will offset losses from the drop in Dreyfus Technology's long position.| Icon Financial vs. Loomis Sayles Inflation | Icon Financial vs. Arrow Managed Futures | Icon Financial vs. Guidepath Managed Futures | Icon Financial vs. Western Asset Inflation |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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