Correlation Between Icon Financial and Franklin New
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Icon Financial and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Franklin New.
Diversification Opportunities for Icon Financial and Franklin New
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Icon and Franklin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Icon Financial i.e., Icon Financial and Franklin New go up and down completely randomly.
Pair Corralation between Icon Financial and Franklin New
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Franklin New. In addition to that, Icon Financial is 34.13 times more volatile than Franklin New York. It trades about -0.16 of its total potential returns per unit of risk. Franklin New York is currently generating about 0.45 per unit of volatility. If you would invest 1,079 in Franklin New York on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Franklin New York or generate 0.93% 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. Franklin New York
Performance |
| Timeline |
| Icon Financial |
| Franklin New York |
Icon Financial and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Franklin New
The main advantage of trading using opposite Icon Financial and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Icon Financial vs. T Rowe Price | Icon Financial vs. Rational Defensive Growth | Icon Financial vs. Franklin Growth Opportunities | Icon Financial vs. Smallcap Growth Fund |
| Franklin New vs. Franklin New York | Franklin New vs. Franklin New York | Franklin New vs. Franklin New York | Franklin New vs. Franklin New York |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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