Correlation Between Icon Financial and Transamerica High
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Transamerica High 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 Transamerica High 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 Transamerica High Yield, you can compare the effects of market volatilities on Icon Financial and Transamerica High 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 Transamerica High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Transamerica High.
Diversification Opportunities for Icon Financial and Transamerica High
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icon and Transamerica is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Transamerica High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica High Yield 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 Transamerica High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica High Yield has no effect on the direction of Icon Financial i.e., Icon Financial and Transamerica High go up and down completely randomly.
Pair Corralation between Icon Financial and Transamerica High
Assuming the 90 days horizon Icon Financial is expected to generate 1.47 times less return on investment than Transamerica High. In addition to that, Icon Financial is 3.72 times more volatile than Transamerica High Yield. It trades about 0.02 of its total potential returns per unit of risk. Transamerica High Yield is currently generating about 0.11 per unit of volatility. If you would invest 698.00 in Transamerica High Yield on September 12, 2024 and sell it today you would earn a total of 131.00 from holding Transamerica High Yield or generate 18.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Icon Financial Fund vs. Transamerica High Yield
Performance |
| Timeline |
| Icon Financial |
| Transamerica High Yield |
Icon Financial and Transamerica High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Transamerica High
The main advantage of trading using opposite Icon Financial and Transamerica High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Transamerica High 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 Transamerica High will offset losses from the drop in Transamerica High's long position.| Icon Financial vs. T Rowe Price | Icon Financial vs. Rational Defensive Growth | Icon Financial vs. Franklin Growth Opportunities | Icon Financial vs. Smallcap Growth Fund |
| Transamerica High vs. Vanguard Financials Index | Transamerica High vs. Fidelity Advisor Financial | Transamerica High vs. Davis Financial Fund | Transamerica High vs. Icon Financial Fund |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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