Correlation Between Icon Financial and Vanguard Small
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Vanguard Small 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 Vanguard Small 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 Vanguard Small Cap Value, you can compare the effects of market volatilities on Icon Financial and Vanguard Small 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 Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Vanguard Small.
Diversification Opportunities for Icon Financial and Vanguard Small
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Vanguard is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Vanguard Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Icon Financial i.e., Icon Financial and Vanguard Small go up and down completely randomly.
Pair Corralation between Icon Financial and Vanguard Small
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Vanguard Small. In addition to that, Icon Financial is 2.4 times more volatile than Vanguard Small Cap Value. It trades about -0.06 of its total potential returns per unit of risk. Vanguard Small Cap Value is currently generating about 0.21 per unit of volatility. If you would invest 4,741 in Vanguard Small Cap Value on September 3, 2024 and sell it today you would earn a total of 445.00 from holding Vanguard Small Cap Value or generate 9.39% 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. Vanguard Small Cap Value
Performance |
| Timeline |
| Icon Financial |
| Vanguard Small Cap |
Icon Financial and Vanguard Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Vanguard Small
The main advantage of trading using opposite Icon Financial and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Vanguard Small 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 Vanguard Small will offset losses from the drop in Vanguard Small's long position.| Icon Financial vs. Vanguard Financials Index | Icon Financial vs. Regional Bank Fund | Icon Financial vs. T Rowe Price | Icon Financial vs. Financial Industries Fund |
| Vanguard Small vs. T Rowe Price | Vanguard Small vs. Virtus Dfa 2040 | Vanguard Small vs. Legg Mason Partners | Vanguard Small vs. Jp Morgan Smartretirement |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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