Correlation Between Icon Information and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Icon Information and Nationwide Growth 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 Nationwide Growth 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 Nationwide Growth Fund, you can compare the effects of market volatilities on Icon Information and Nationwide Growth 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 Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Nationwide Growth.
Diversification Opportunities for Icon Information and Nationwide Growth
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and Nationwide is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth 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 Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Icon Information i.e., Icon Information and Nationwide Growth go up and down completely randomly.
Pair Corralation between Icon Information and Nationwide Growth
Assuming the 90 days horizon Icon Information Technology is expected to generate 1.1 times more return on investment than Nationwide Growth. However, Icon Information is 1.1 times more volatile than Nationwide Growth Fund. It trades about 0.31 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.16 per unit of risk. If you would invest 1,584 in Icon Information Technology on November 3, 2024 and sell it today you would earn a total of 104.00 from holding Icon Information Technology or generate 6.57% 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. Nationwide Growth Fund
Performance |
| Timeline |
| Icon Information Tec |
| Nationwide Growth |
Icon Information and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Nationwide Growth
The main advantage of trading using opposite Icon Information and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Nationwide Growth 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 Nationwide Growth will offset losses from the drop in Nationwide Growth's long position.| Icon Information vs. Mid Cap 15x Strategy | Icon Information vs. Vanguard Developed Markets | Icon Information vs. Old Westbury Short Term | Icon Information vs. Siit Emerging Markets |
| Nationwide Growth vs. Upright Growth Income | Nationwide Growth vs. Needham Aggressive Growth | Nationwide Growth vs. Vanguard Growth And | Nationwide Growth vs. Growth Portfolio Class |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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