Correlation Between Icon Information and Global Technology
Can any of the company-specific risk be diversified away by investing in both Icon Information and Global Technology 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 Global Technology 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 Global Technology Portfolio, you can compare the effects of market volatilities on Icon Information and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Global Technology.
Diversification Opportunities for Icon Information and Global Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Icon Information i.e., Icon Information and Global Technology go up and down completely randomly.
Pair Corralation between Icon Information and Global Technology
Assuming the 90 days horizon Icon Information is expected to generate 1.93 times less return on investment than Global Technology. But when comparing it to its historical volatility, Icon Information Technology is 1.52 times less risky than Global Technology. It trades about 0.08 of its potential returns per unit of risk. Global Technology Portfolio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,598 in Global Technology Portfolio on August 25, 2024 and sell it today you would earn a total of 533.00 from holding Global Technology Portfolio or generate 33.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. Global Technology Portfolio
Performance |
| Timeline |
| Icon Information Tec |
| Global Technology |
Icon Information and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Global Technology
The main advantage of trading using opposite Icon Information and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.| Icon Information vs. VEEA | Icon Information vs. VivoPower International PLC | Icon Information vs. WEBTOON Entertainment Common | Icon Information vs. Icon Bond Fund |
| Global Technology vs. Janus Global Life | Global Technology vs. Janus Research Fund | Global Technology vs. Janus Enterprise Fund | Global Technology vs. Janus Global Research |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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