Correlation Between Icon Financial and Income Stock
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Income Stock 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 Income Stock 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 Income Stock Fund, you can compare the effects of market volatilities on Icon Financial and Income Stock 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 Income Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Income Stock.
Diversification Opportunities for Icon Financial and Income Stock
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Income is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Income Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Stock 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 Income Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Stock has no effect on the direction of Icon Financial i.e., Icon Financial and Income Stock go up and down completely randomly.
Pair Corralation between Icon Financial and Income Stock
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Income Stock. In addition to that, Icon Financial is 1.6 times more volatile than Income Stock Fund. It trades about -0.15 of its total potential returns per unit of risk. Income Stock Fund is currently generating about -0.12 per unit of volatility. If you would invest 1,858 in Income Stock Fund on November 27, 2024 and sell it today you would lose (24.00) from holding Income Stock Fund or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Income Stock Fund
Performance |
| Timeline |
| Icon Financial |
| Income Stock |
Icon Financial and Income Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Income Stock
The main advantage of trading using opposite Icon Financial and Income Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Income Stock 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 Income Stock will offset losses from the drop in Income Stock's long position.| Icon Financial vs. T Rowe Price | Icon Financial vs. Touchstone Sands Capital | Icon Financial vs. Rational Defensive Growth | Icon Financial vs. L Abbett Growth |
| Income Stock vs. Rationalpier 88 Convertible | Income Stock vs. Advent Claymore Convertible | Income Stock vs. Invesco Vertible Securities | Income Stock vs. Harbor Vertible Securities |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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