Correlation Between Icon Information and Wanger International
Can any of the company-specific risk be diversified away by investing in both Icon Information and Wanger International 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 Wanger International 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 Wanger International Wanger, you can compare the effects of market volatilities on Icon Information and Wanger International 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 Wanger International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Wanger International.
Diversification Opportunities for Icon Information and Wanger International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icon and Wanger is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Wanger International Wanger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wanger International 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 Wanger International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wanger International has no effect on the direction of Icon Information i.e., Icon Information and Wanger International go up and down completely randomly.
Pair Corralation between Icon Information and Wanger International
Assuming the 90 days horizon Icon Information Technology is expected to generate 1.05 times more return on investment than Wanger International. However, Icon Information is 1.05 times more volatile than Wanger International Wanger. It trades about 0.03 of its potential returns per unit of risk. Wanger International Wanger is currently generating about 0.03 per unit of risk. If you would invest 1,465 in Icon Information Technology on September 14, 2024 and sell it today you would earn a total of 185.00 from holding Icon Information Technology or generate 12.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Icon Information Technology vs. Wanger International Wanger
Performance |
| Timeline |
| Icon Information Tec |
| Wanger International |
Icon Information and Wanger International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Wanger International
The main advantage of trading using opposite Icon Information and Wanger International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Wanger International 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 Wanger International will offset losses from the drop in Wanger International's long position.| Icon Information vs. Blackrock Moderate Prepared | Icon Information vs. Calvert Moderate Allocation | Icon Information vs. Jpmorgan Smartretirement 2035 | Icon Information vs. Columbia Moderate Growth |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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