Correlation Between Icon Financial and Pax Balanced
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Pax Balanced 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 Pax Balanced 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 Pax Balanced Fund, you can compare the effects of market volatilities on Icon Financial and Pax Balanced 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 Pax Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Pax Balanced.
Diversification Opportunities for Icon Financial and Pax Balanced
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Icon and Pax is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Pax Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Balanced 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 Pax Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Balanced has no effect on the direction of Icon Financial i.e., Icon Financial and Pax Balanced go up and down completely randomly.
Pair Corralation between Icon Financial and Pax Balanced
Assuming the 90 days horizon Icon Financial Fund is expected to generate 1.75 times more return on investment than Pax Balanced. However, Icon Financial is 1.75 times more volatile than Pax Balanced Fund. It trades about 0.08 of its potential returns per unit of risk. Pax Balanced Fund is currently generating about 0.1 per unit of risk. If you would invest 968.00 in Icon Financial Fund on August 26, 2024 and sell it today you would earn a total of 168.00 from holding Icon Financial Fund or generate 17.36% 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. Pax Balanced Fund
Performance |
| Timeline |
| Icon Financial |
| Pax Balanced |
Icon Financial and Pax Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Pax Balanced
The main advantage of trading using opposite Icon Financial and Pax Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Pax Balanced 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 Pax Balanced will offset losses from the drop in Pax Balanced's long position.| Icon Financial vs. Qs Moderate Growth | Icon Financial vs. Franklin Growth Opportunities | Icon Financial vs. Mid Cap Growth | Icon Financial vs. T Rowe Price |
| Pax Balanced vs. 1919 Financial Services | Pax Balanced vs. Icon Financial Fund | Pax Balanced vs. Royce Global Financial | Pax Balanced vs. Goldman Sachs 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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