Correlation Between Icon Financial and Gmo Trust
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Gmo Trust 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 Gmo Trust 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 Gmo Trust , you can compare the effects of market volatilities on Icon Financial and Gmo Trust 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 Gmo Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Gmo Trust.
Diversification Opportunities for Icon Financial and Gmo Trust
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Gmo is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Gmo Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Trust 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 Gmo Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Trust has no effect on the direction of Icon Financial i.e., Icon Financial and Gmo Trust go up and down completely randomly.
Pair Corralation between Icon Financial and Gmo Trust
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Gmo Trust. In addition to that, Icon Financial is 3.15 times more volatile than Gmo Trust . It trades about -0.07 of its total potential returns per unit of risk. Gmo Trust is currently generating about 0.28 per unit of volatility. If you would invest 2,353 in Gmo Trust on September 5, 2024 and sell it today you would earn a total of 147.00 from holding Gmo Trust or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Financial Fund vs. Gmo Trust
Performance |
| Timeline |
| Icon Financial |
| Gmo Trust |
Icon Financial and Gmo Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Gmo Trust
The main advantage of trading using opposite Icon Financial and Gmo Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Gmo Trust 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 Gmo Trust will offset losses from the drop in Gmo Trust's long position.| Icon Financial vs. Harbor Diversified International | Icon Financial vs. Lord Abbett Diversified | Icon Financial vs. Aqr Diversified Arbitrage | Icon Financial vs. Adams Diversified Equity |
| Gmo Trust vs. Angel Oak Financial | Gmo Trust vs. Fidelity Advisor Financial | Gmo Trust vs. Royce Global Financial | Gmo Trust 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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