Correlation Between Icon Financial and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Icon Financial and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Old Westbury.
Diversification Opportunities for Icon Financial and Old Westbury
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icon and Old is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Icon Financial i.e., Icon Financial and Old Westbury go up and down completely randomly.
Pair Corralation between Icon Financial and Old Westbury
Assuming the 90 days horizon Icon Financial Fund is expected to generate 6.61 times more return on investment than Old Westbury. However, Icon Financial is 6.61 times more volatile than Old Westbury Municipal. It trades about 0.01 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.03 per unit of risk. If you would invest 980.00 in Icon Financial Fund on October 28, 2024 and sell it today you would lose (1.00) from holding Icon Financial Fund or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Old Westbury Municipal
Performance |
| Timeline |
| Icon Financial |
| Old Westbury Municipal |
Icon Financial and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Old Westbury
The main advantage of trading using opposite Icon Financial and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Icon Financial vs. Icon Bond Fund | Icon Financial vs. Icon Bond Fund | Icon Financial vs. Icon Longshort Fund | Icon Financial vs. Icon Longshort Fund |
| Old Westbury vs. International Investors Gold | Old Westbury vs. Goldman Sachs Strategic | Old Westbury vs. Wells Fargo Advantage | Old Westbury vs. Deutsche Gold Precious |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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