Correlation Between Icon Financial and Icon Long/short
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Icon Long/short 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 Icon Long/short 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 Icon Longshort Fund, you can compare the effects of market volatilities on Icon Financial and Icon Long/short 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 Icon Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Icon Long/short.
Diversification Opportunities for Icon Financial and Icon Long/short
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Icon and Icon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Icon Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Long/short 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 Icon Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Long/short has no effect on the direction of Icon Financial i.e., Icon Financial and Icon Long/short go up and down completely randomly.
Pair Corralation between Icon Financial and Icon Long/short
Assuming the 90 days horizon Icon Financial is expected to generate 1.46 times less return on investment than Icon Long/short. But when comparing it to its historical volatility, Icon Financial Fund is 1.17 times less risky than Icon Long/short. It trades about 0.22 of its potential returns per unit of risk. Icon Longshort Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,873 in Icon Longshort Fund on August 31, 2024 and sell it today you would earn a total of 267.00 from holding Icon Longshort Fund or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Icon Longshort Fund
Performance |
| Timeline |
| Icon Financial |
| Icon Long/short |
Icon Financial and Icon Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Icon Long/short
The main advantage of trading using opposite Icon Financial and Icon Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Icon Long/short 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 Icon Long/short will offset losses from the drop in Icon Long/short's long position.| Icon Financial vs. Touchstone Small Cap | Icon Financial vs. Small Pany Growth | Icon Financial vs. Legg Mason Partners | Icon Financial vs. Growth Opportunities 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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