Correlation Between Icon Financial and Franklin Microcap
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Franklin Microcap 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 Microcap 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 MICROCAP VALUE, you can compare the effects of market volatilities on Icon Financial and Franklin Microcap 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 Microcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Franklin Microcap.
Diversification Opportunities for Icon Financial and Franklin Microcap
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Franklin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and FRANKLIN MICROCAP VALUE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Microcap Value 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 Microcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Microcap Value has no effect on the direction of Icon Financial i.e., Icon Financial and Franklin Microcap go up and down completely randomly.
Pair Corralation between Icon Financial and Franklin Microcap
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Franklin Microcap. In addition to that, Icon Financial is 2.15 times more volatile than FRANKLIN MICROCAP VALUE. It trades about -0.07 of its total potential returns per unit of risk. FRANKLIN MICROCAP VALUE is currently generating about 0.3 per unit of volatility. If you would invest 2,999 in FRANKLIN MICROCAP VALUE on September 1, 2024 and sell it today you would earn a total of 327.00 from holding FRANKLIN MICROCAP VALUE or generate 10.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Financial Fund vs. FRANKLIN MICROCAP VALUE
Performance |
| Timeline |
| Icon Financial |
| Franklin Microcap Value |
Icon Financial and Franklin Microcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Franklin Microcap
The main advantage of trading using opposite Icon Financial and Franklin Microcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Franklin Microcap 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 Microcap will offset losses from the drop in Franklin Microcap's long position.| Icon Financial vs. Nuveen Minnesota Municipal | Icon Financial vs. Bbh Intermediate Municipal | Icon Financial vs. Blrc Sgy Mnp | Icon Financial vs. T Rowe Price |
| Franklin Microcap vs. Ab Select Longshort | Franklin Microcap vs. Maryland Short Term Tax Free | Franklin Microcap vs. Old Westbury Short Term | Franklin Microcap vs. Franklin Federal Limited Term |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |