Correlation Between Icon Financial and Highland Long/short
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Highland Long/short 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 Highland Long/short 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on Icon Financial and Highland Long/short 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 Highland Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Highland Long/short.
Diversification Opportunities for Icon Financial and Highland Long/short
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Icon and Highland is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Long/short 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 Highland Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Long/short has no effect on the direction of Icon Financial i.e., Icon Financial and Highland Long/short go up and down completely randomly.
Pair Corralation between Icon Financial and Highland Long/short
Assuming the 90 days horizon Icon Financial is expected to generate 2.65 times less return on investment than Highland Long/short. In addition to that, Icon Financial is 5.53 times more volatile than Highland Longshort Healthcare. It trades about 0.01 of its total potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.13 per unit of volatility. If you would invest 1,456 in Highland Longshort Healthcare on November 10, 2024 and sell it today you would earn a total of 204.00 from holding Highland Longshort Healthcare or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Icon Financial |
| Highland Long/short |
Icon Financial and Highland Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Highland Long/short
The main advantage of trading using opposite Icon Financial and Highland Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Highland Long/short 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 Highland Long/short will offset losses from the drop in Highland Long/short's long position.| Icon Financial vs. Alpine High Yield | Icon Financial vs. Multi Manager High Yield | Icon Financial vs. Neuberger Berman Income | Icon Financial vs. Simt High Yield |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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