Correlation Between Icon Information and Franklin New
Can any of the company-specific risk be diversified away by investing in both Icon Information and Franklin New 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 Franklin New 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 Franklin New York, you can compare the effects of market volatilities on Icon Information and Franklin New 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 Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Franklin New.
Diversification Opportunities for Icon Information and Franklin New
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icon and Franklin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Icon Information i.e., Icon Information and Franklin New go up and down completely randomly.
Pair Corralation between Icon Information and Franklin New
Assuming the 90 days horizon Icon Information Technology is expected to generate 5.54 times more return on investment than Franklin New. However, Icon Information is 5.54 times more volatile than Franklin New York. It trades about 0.15 of its potential returns per unit of risk. Franklin New York is currently generating about 0.07 per unit of risk. If you would invest 1,624 in Icon Information Technology on October 25, 2024 and sell it today you would earn a total of 38.00 from holding Icon Information Technology or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. Franklin New York
Performance |
| Timeline |
| Icon Information Tec |
| Franklin New York |
Icon Information and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Franklin New
The main advantage of trading using opposite Icon Information and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Icon Information vs. Hartford Moderate Allocation | Icon Information vs. Transamerica Cleartrack Retirement | Icon Information vs. Calvert Moderate Allocation | Icon Information vs. Jp Morgan Smartretirement |
| Franklin New vs. Wells Fargo Diversified | Franklin New vs. Madison Diversified Income | Franklin New vs. Stone Ridge Diversified | Franklin New vs. Aqr Diversified Arbitrage |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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