Correlation Between Icon Information and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Icon Information and Abbey Capital 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 Information and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Information Technology and Abbey Capital Futures, you can compare the effects of market volatilities on Icon Information and Abbey Capital 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 Information with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Abbey Capital.
Diversification Opportunities for Icon Information and Abbey Capital
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Abbey is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Icon Information 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 Information Technology are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Icon Information i.e., Icon Information and Abbey Capital go up and down completely randomly.
Pair Corralation between Icon Information and Abbey Capital
Assuming the 90 days horizon Icon Information Technology is expected to generate 2.03 times more return on investment than Abbey Capital. However, Icon Information is 2.03 times more volatile than Abbey Capital Futures. It trades about 0.07 of its potential returns per unit of risk. Abbey Capital Futures is currently generating about 0.0 per unit of risk. If you would invest 1,424 in Icon Information Technology on November 5, 2024 and sell it today you would earn a total of 264.00 from holding Icon Information Technology or generate 18.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. Abbey Capital Futures
Performance |
| Timeline |
| Icon Information Tec |
| Abbey Capital Futures |
Icon Information and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Abbey Capital
The main advantage of trading using opposite Icon Information and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Icon Information vs. Ab Bond Inflation | Icon Information vs. Franklin Adjustable Government | Icon Information vs. Gmo Emerging Ntry | Icon Information vs. Ambrus Core Bond |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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