Correlation Between Icon Financial and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Federated Strategic 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 Federated Strategic 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 Federated Strategic Income, you can compare the effects of market volatilities on Icon Financial and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Federated Strategic.
Diversification Opportunities for Icon Financial and Federated Strategic
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Federated is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Icon Financial i.e., Icon Financial and Federated Strategic go up and down completely randomly.
Pair Corralation between Icon Financial and Federated Strategic
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Federated Strategic. In addition to that, Icon Financial is 11.48 times more volatile than Federated Strategic Income. It trades about -0.07 of its total potential returns per unit of risk. Federated Strategic Income is currently generating about 0.16 per unit of volatility. If you would invest 821.00 in Federated Strategic Income on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Federated Strategic Income or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Federated Strategic Income
Performance |
| Timeline |
| Icon Financial |
| Federated Strategic |
Icon Financial and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Federated Strategic
The main advantage of trading using opposite Icon Financial and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Icon Financial vs. Nuveen Minnesota Municipal | Icon Financial vs. Bbh Intermediate Municipal | Icon Financial vs. Blrc Sgy Mnp | Icon Financial vs. T Rowe Price |
| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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