Correlation Between Icon Financial and State Street
Can any of the company-specific risk be diversified away by investing in both Icon Financial and State Street 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 State Street 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 State Street Aggregate, you can compare the effects of market volatilities on Icon Financial and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and State Street.
Diversification Opportunities for Icon Financial and State Street
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Icon and State is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and State Street Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Aggregate 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Aggregate has no effect on the direction of Icon Financial i.e., Icon Financial and State Street go up and down completely randomly.
Pair Corralation between Icon Financial and State Street
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the State Street. In addition to that, Icon Financial is 9.32 times more volatile than State Street Aggregate. It trades about -0.07 of its total potential returns per unit of risk. State Street Aggregate is currently generating about 0.14 per unit of volatility. If you would invest 8,610 in State Street Aggregate on September 4, 2024 and sell it today you would earn a total of 91.00 from holding State Street Aggregate or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. State Street Aggregate
Performance |
| Timeline |
| Icon Financial |
| State Street Aggregate |
Icon Financial and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and State Street
The main advantage of trading using opposite Icon Financial and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. Small Midcap Dividend Income | State Street vs. Artisan Small Cap | State Street vs. Massmutual Select Small | State Street vs. Ancorathelen Small Mid Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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