Correlation Between Icon Information and Payden Core
Can any of the company-specific risk be diversified away by investing in both Icon Information and Payden Core 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 Payden Core 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 Payden E Bond, you can compare the effects of market volatilities on Icon Information and Payden Core 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 Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Payden Core.
Diversification Opportunities for Icon Information and Payden Core
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Icon and Payden is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Payden E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden E Bond 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 Payden Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden E Bond has no effect on the direction of Icon Information i.e., Icon Information and Payden Core go up and down completely randomly.
Pair Corralation between Icon Information and Payden Core
Assuming the 90 days horizon Icon Information Technology is expected to generate 3.26 times more return on investment than Payden Core. However, Icon Information is 3.26 times more volatile than Payden E Bond. It trades about 0.21 of its potential returns per unit of risk. Payden E Bond is currently generating about 0.12 per unit of risk. If you would invest 1,625 in Icon Information Technology on November 6, 2024 and sell it today you would earn a total of 63.00 from holding Icon Information Technology or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Icon Information Technology vs. Payden E Bond
Performance |
| Timeline |
| Icon Information Tec |
| Payden E Bond |
Icon Information and Payden Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Payden Core
The main advantage of trading using opposite Icon Information and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Payden Core 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 Payden Core will offset losses from the drop in Payden Core's long position.| Icon Information vs. Salient Mlp Energy | Icon Information vs. Hennessy Bp Energy | Icon Information vs. Alpsalerian Energy Infrastructure | Icon Information vs. Vanguard Energy Index |
| Payden Core vs. Eagle Mlp Strategy | Payden Core vs. Franklin Emerging Market | Payden Core vs. Artisan Developing World | Payden Core vs. Calvert Developed Market |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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