Correlation Between Icon Information and State Street
Can any of the company-specific risk be diversified away by investing in both Icon Information and State Street 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 State Street 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 State Street Global, you can compare the effects of market volatilities on Icon Information and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and State Street.
Diversification Opportunities for Icon Information and State Street
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Icon and State is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and State Street Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Global 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Global has no effect on the direction of Icon Information i.e., Icon Information and State Street go up and down completely randomly.
Pair Corralation between Icon Information and State Street
Assuming the 90 days horizon Icon Information Technology is expected to under-perform the State Street. In addition to that, Icon Information is 2.44 times more volatile than State Street Global. It trades about -0.05 of its total potential returns per unit of risk. State Street Global is currently generating about -0.1 per unit of volatility. If you would invest 11,042 in State Street Global on September 3, 2024 and sell it today you would lose (150.00) from holding State Street Global or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. State Street Global
Performance |
| Timeline |
| Icon Information Tec |
| State Street Global |
Icon Information and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and State Street
The main advantage of trading using opposite Icon Information and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Icon Information vs. Blackrock Science Technology | Icon Information vs. Pgim Jennison Technology | Icon Information vs. Towpath Technology | Icon Information vs. Dreyfus Technology Growth |
| State Street vs. Goldman Sachs Short | State Street vs. Great West Goldman Sachs | State Street vs. Fidelity Advisor Gold | State Street vs. Vy Goldman Sachs |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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