Correlation Between Icon Financial and First Investors
Can any of the company-specific risk be diversified away by investing in both Icon Financial and First Investors 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 First Investors 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 First Investors Growth, you can compare the effects of market volatilities on Icon Financial and First Investors 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 First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and First Investors.
Diversification Opportunities for Icon Financial and First Investors
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icon and First is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and First Investors Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors 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 First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Growth has no effect on the direction of Icon Financial i.e., Icon Financial and First Investors go up and down completely randomly.
Pair Corralation between Icon Financial and First Investors
Assuming the 90 days horizon Icon Financial is expected to generate 2.59 times less return on investment than First Investors. In addition to that, Icon Financial is 1.41 times more volatile than First Investors Growth. It trades about 0.02 of its total potential returns per unit of risk. First Investors Growth is currently generating about 0.08 per unit of volatility. If you would invest 1,237 in First Investors Growth on September 13, 2024 and sell it today you would earn a total of 426.00 from holding First Investors Growth or generate 34.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. First Investors Growth
Performance |
| Timeline |
| Icon Financial |
| First Investors Growth |
Icon Financial and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and First Investors
The main advantage of trading using opposite Icon Financial and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, First Investors 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 First Investors will offset losses from the drop in First Investors' long position.| Icon Financial vs. Locorr Market Trend | Icon Financial vs. Transamerica Emerging Markets | Icon Financial vs. Ashmore Emerging Markets | Icon Financial vs. Kinetics Market Opportunities |
| First Investors vs. Fidelity Advisor Financial | First Investors vs. Angel Oak Financial | First Investors vs. Goldman Sachs Financial | First Investors vs. Icon Financial Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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