Correlation Between Icon Financial and Western Asset
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Western Asset 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 Western Asset 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 Western Asset Municipal, you can compare the effects of market volatilities on Icon Financial and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Western Asset.
Diversification Opportunities for Icon Financial and Western Asset
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Icon and Western is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Municipal has no effect on the direction of Icon Financial i.e., Icon Financial and Western Asset go up and down completely randomly.
Pair Corralation between Icon Financial and Western Asset
Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Western Asset. In addition to that, Icon Financial is 11.49 times more volatile than Western Asset Municipal. It trades about -0.23 of its total potential returns per unit of risk. Western Asset Municipal is currently generating about -0.21 per unit of volatility. If you would invest 724.00 in Western Asset Municipal on September 23, 2024 and sell it today you would lose (9.00) from holding Western Asset Municipal or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Western Asset Municipal
Performance |
| Timeline |
| Icon Financial |
| Western Asset Municipal |
Icon Financial and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Western Asset
The main advantage of trading using opposite Icon Financial and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Icon Financial vs. James Balanced Golden | Icon Financial vs. Vy Goldman Sachs | Icon Financial vs. Gabelli Gold Fund | Icon Financial vs. Gamco Global Gold |
| Western Asset vs. Gabelli Global Financial | Western Asset vs. Prudential Jennison Financial | Western Asset vs. Angel Oak Financial | Western Asset 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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