Correlation Between Icon Financial and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Metropolitan West 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 Metropolitan West 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 Metropolitan West Flexible, you can compare the effects of market volatilities on Icon Financial and Metropolitan West 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 Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Metropolitan West.
Diversification Opportunities for Icon Financial and Metropolitan West
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Icon and Metropolitan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Metropolitan West Flexible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West 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 Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West has no effect on the direction of Icon Financial i.e., Icon Financial and Metropolitan West go up and down completely randomly.
Pair Corralation between Icon Financial and Metropolitan West
Assuming the 90 days horizon Icon Financial is expected to generate 190.02 times less return on investment than Metropolitan West. But when comparing it to its historical volatility, Icon Financial Fund is 19.91 times less risky than Metropolitan West. It trades about 0.01 of its potential returns per unit of risk. Metropolitan West Flexible is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 726.00 in Metropolitan West Flexible on September 4, 2024 and sell it today you would earn a total of 3,107 from holding Metropolitan West Flexible or generate 427.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Icon Financial Fund vs. Metropolitan West Flexible
Performance |
| Timeline |
| Icon Financial |
| Metropolitan West |
Icon Financial and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Metropolitan West
The main advantage of trading using opposite Icon Financial and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Icon Financial vs. Limited Term Tax | Icon Financial vs. Bbh Intermediate Municipal | Icon Financial vs. Alliancebernstein National Municipal | Icon Financial vs. Gamco Global Telecommunications |
| Metropolitan West vs. John Hancock Financial | Metropolitan West vs. Icon Financial Fund | Metropolitan West vs. Prudential Financial Services | Metropolitan West vs. Royce Global Financial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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