Correlation Between Icon Financial and Multisector Bond
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Multisector Bond 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 Multisector Bond 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 Multisector Bond Sma, you can compare the effects of market volatilities on Icon Financial and Multisector Bond 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 Multisector Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Multisector Bond.
Diversification Opportunities for Icon Financial and Multisector Bond
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Multisector is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Multisector Bond Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multisector Bond Sma 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 Multisector Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multisector Bond Sma has no effect on the direction of Icon Financial i.e., Icon Financial and Multisector Bond go up and down completely randomly.
Pair Corralation between Icon Financial and Multisector Bond
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Multisector Bond. In addition to that, Icon Financial is 3.63 times more volatile than Multisector Bond Sma. It trades about 0.0 of its total potential returns per unit of risk. Multisector Bond Sma is currently generating about 0.09 per unit of volatility. If you would invest 1,252 in Multisector Bond Sma on October 20, 2024 and sell it today you would earn a total of 105.00 from holding Multisector Bond Sma or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Multisector Bond Sma
Performance |
| Timeline |
| Icon Financial |
| Multisector Bond Sma |
Icon Financial and Multisector Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Multisector Bond
The main advantage of trading using opposite Icon Financial and Multisector Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Multisector Bond 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 Multisector Bond will offset losses from the drop in Multisector Bond's long position.| Icon Financial vs. Ultrasmall Cap Profund Ultrasmall Cap | Icon Financial vs. Small Cap Value Fund | Icon Financial vs. Small Cap Value | Icon Financial vs. Ultramid Cap Profund Ultramid Cap |
| Multisector Bond vs. Transamerica Financial Life | Multisector Bond vs. Blackstone Secured Lending | Multisector Bond vs. Mesirow Financial Small | Multisector Bond 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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