Correlation Between Icon Information and Mainstay Large
Can any of the company-specific risk be diversified away by investing in both Icon Information and Mainstay Large 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 Mainstay Large 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 Mainstay Large Cap, you can compare the effects of market volatilities on Icon Information and Mainstay Large 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 Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Mainstay Large.
Diversification Opportunities for Icon Information and Mainstay Large
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Mainstay is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large Cap 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 Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Icon Information i.e., Icon Information and Mainstay Large go up and down completely randomly.
Pair Corralation between Icon Information and Mainstay Large
Assuming the 90 days horizon Icon Information Technology is expected to under-perform the Mainstay Large. In addition to that, Icon Information is 1.59 times more volatile than Mainstay Large Cap. It trades about -0.01 of its total potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.32 per unit of volatility. If you would invest 1,316 in Mainstay Large Cap on September 1, 2024 and sell it today you would earn a total of 93.00 from holding Mainstay Large Cap or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Information Technology vs. Mainstay Large Cap
Performance |
| Timeline |
| Icon Information Tec |
| Mainstay Large Cap |
Icon Information and Mainstay Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Mainstay Large
The main advantage of trading using opposite Icon Information and Mainstay Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Mainstay Large 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 Mainstay Large will offset losses from the drop in Mainstay Large's long position.| Icon Information vs. World Energy Fund | Icon Information vs. Hennessy Bp Energy | Icon Information vs. Alpsalerian Energy Infrastructure | Icon Information vs. Dreyfus Natural Resources |
| Mainstay Large vs. Goldman Sachs Technology | Mainstay Large vs. Icon Information Technology | Mainstay Large vs. Science Technology Fund | Mainstay Large vs. Fidelity Advisor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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