Correlation Between Icon Information and Voya Midcap
Can any of the company-specific risk be diversified away by investing in both Icon Information and Voya Midcap 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 Voya Midcap 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 Voya Midcap Opportunities, you can compare the effects of market volatilities on Icon Information and Voya Midcap 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 Voya Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Voya Midcap.
Diversification Opportunities for Icon Information and Voya Midcap
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Voya is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Voya Midcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Midcap Opportunities 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 Voya Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Midcap Opportunities has no effect on the direction of Icon Information i.e., Icon Information and Voya Midcap go up and down completely randomly.
Pair Corralation between Icon Information and Voya Midcap
Assuming the 90 days horizon Icon Information is expected to generate 2.45 times less return on investment than Voya Midcap. But when comparing it to its historical volatility, Icon Information Technology is 1.34 times less risky than Voya Midcap. It trades about 0.03 of its potential returns per unit of risk. Voya Midcap Opportunities is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,515 in Voya Midcap Opportunities on October 26, 2024 and sell it today you would earn a total of 250.00 from holding Voya Midcap Opportunities or generate 9.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. Voya Midcap Opportunities
Performance |
| Timeline |
| Icon Information Tec |
| Voya Midcap Opportunities |
Icon Information and Voya Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Voya Midcap
The main advantage of trading using opposite Icon Information and Voya Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Voya Midcap 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 Voya Midcap will offset losses from the drop in Voya Midcap's long position.| Icon Information vs. Rbc Global Opportunities | Icon Information vs. Aqr Global Macro | Icon Information vs. Templeton Global Balanced | Icon Information vs. Legg Mason Global |
| Voya Midcap vs. Blackrock Science Technology | Voya Midcap vs. Icon Information Technology | Voya Midcap vs. Technology Ultrasector Profund | Voya Midcap vs. Columbia Global Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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