Correlation Between Icon Information and Allianzgi Health
Can any of the company-specific risk be diversified away by investing in both Icon Information and Allianzgi Health 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 Allianzgi Health 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 Allianzgi Health Sciences, you can compare the effects of market volatilities on Icon Information and Allianzgi Health 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 Allianzgi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Allianzgi Health.
Diversification Opportunities for Icon Information and Allianzgi Health
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Allianzgi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Allianzgi Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Health Sciences 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 Allianzgi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Health Sciences has no effect on the direction of Icon Information i.e., Icon Information and Allianzgi Health go up and down completely randomly.
Pair Corralation between Icon Information and Allianzgi Health
Assuming the 90 days horizon Icon Information Technology is expected to under-perform the Allianzgi Health. In addition to that, Icon Information is 1.4 times more volatile than Allianzgi Health Sciences. It trades about -0.03 of its total potential returns per unit of risk. Allianzgi Health Sciences is currently generating about 0.0 per unit of volatility. If you would invest 2,942 in Allianzgi Health Sciences on November 6, 2024 and sell it today you would lose (14.00) from holding Allianzgi Health Sciences or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. Allianzgi Health Sciences
Performance |
| Timeline |
| Icon Information Tec |
| Allianzgi Health Sciences |
Icon Information and Allianzgi Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Allianzgi Health
The main advantage of trading using opposite Icon Information and Allianzgi Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information position performs unexpectedly, Allianzgi Health 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 Allianzgi Health will offset losses from the drop in Allianzgi Health's long position.| Icon Information vs. Baron Real Estate | Icon Information vs. Real Estate Ultrasector | Icon Information vs. Redwood Real Estate | Icon Information vs. Deutsche Real Estate |
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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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