Correlation Between Icon Financial and Hennessy Large
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Hennessy Large 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 Hennessy Large 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 Hennessy Large Cap, you can compare the effects of market volatilities on Icon Financial and Hennessy Large 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 Hennessy Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Hennessy Large.
Diversification Opportunities for Icon Financial and Hennessy Large
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Hennessy is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Hennessy Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Large Cap 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 Hennessy Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Large Cap has no effect on the direction of Icon Financial i.e., Icon Financial and Hennessy Large go up and down completely randomly.
Pair Corralation between Icon Financial and Hennessy Large
Assuming the 90 days horizon Icon Financial is expected to generate 18.73 times less return on investment than Hennessy Large. But when comparing it to its historical volatility, Icon Financial Fund is 1.06 times less risky than Hennessy Large. It trades about 0.01 of its potential returns per unit of risk. Hennessy Large Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,951 in Hennessy Large Cap on September 1, 2024 and sell it today you would earn a total of 1,261 from holding Hennessy Large Cap or generate 64.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Hennessy Large Cap
Performance |
| Timeline |
| Icon Financial |
| Hennessy Large Cap |
Icon Financial and Hennessy Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Hennessy Large
The main advantage of trading using opposite Icon Financial and Hennessy Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Hennessy Large 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 Hennessy Large will offset losses from the drop in Hennessy Large'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 |
| Hennessy Large vs. Hennessy Large Cap | Hennessy Large vs. Dow 2x Strategy | Hennessy Large vs. Dow 2x Strategy | Hennessy Large vs. T Rowe Price |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |