Correlation Between Icon Financial and Pender Real
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Pender Real 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 Pender Real 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 Pender Real Estate, you can compare the effects of market volatilities on Icon Financial and Pender Real 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 Pender Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Pender Real.
Diversification Opportunities for Icon Financial and Pender Real
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Pender is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Pender Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pender Real Estate 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 Pender Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pender Real Estate has no effect on the direction of Icon Financial i.e., Icon Financial and Pender Real go up and down completely randomly.
Pair Corralation between Icon Financial and Pender Real
Assuming the 90 days horizon Icon Financial Fund is expected to generate 30.07 times more return on investment than Pender Real. However, Icon Financial is 30.07 times more volatile than Pender Real Estate. It trades about 0.2 of its potential returns per unit of risk. Pender Real Estate is currently generating about 0.55 per unit of risk. If you would invest 1,091 in Icon Financial Fund on August 28, 2024 and sell it today you would earn a total of 61.00 from holding Icon Financial Fund or generate 5.59% 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. Pender Real Estate
Performance |
| Timeline |
| Icon Financial |
| Pender Real Estate |
Icon Financial and Pender Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Pender Real
The main advantage of trading using opposite Icon Financial and Pender Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Pender Real 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 Pender Real will offset losses from the drop in Pender Real's long position.| Icon Financial vs. Loomis Sayles Inflation | Icon Financial vs. Arrow Managed Futures | Icon Financial vs. Guidepath Managed Futures | Icon Financial vs. Western Asset Inflation |
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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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