Correlation Between Icon Financial and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Aberdeen Emerging 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 Aberdeen Emerging 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 Aberdeen Emerging Markets, you can compare the effects of market volatilities on Icon Financial and Aberdeen Emerging 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 Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Aberdeen Emerging.
Diversification Opportunities for Icon Financial and Aberdeen Emerging
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icon and Aberdeen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets 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 Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Icon Financial i.e., Icon Financial and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Icon Financial and Aberdeen Emerging
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Aberdeen Emerging. In addition to that, Icon Financial is 4.54 times more volatile than Aberdeen Emerging Markets. It trades about -0.16 of its total potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about -0.1 per unit of volatility. If you would invest 1,386 in Aberdeen Emerging Markets on September 12, 2024 and sell it today you would lose (21.00) from holding Aberdeen Emerging Markets or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Financial Fund vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Icon Financial |
| Aberdeen Emerging Markets |
Icon Financial and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Aberdeen Emerging
The main advantage of trading using opposite Icon Financial and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Aberdeen Emerging 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 Aberdeen Emerging will offset losses from the drop in Aberdeen Emerging'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 |
| Aberdeen Emerging vs. Locorr Market Trend | Aberdeen Emerging vs. Extended Market Index | Aberdeen Emerging vs. Kinetics Market Opportunities | Aberdeen Emerging vs. Shelton Emerging Markets |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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