Correlation Between Icon Equity and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Icon Equity and Pimco Income 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 Equity and Pimco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Equity Income and Pimco Income Fund, you can compare the effects of market volatilities on Icon Equity and Pimco Income 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 Equity with a short position of Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Equity and Pimco Income.
Diversification Opportunities for Icon Equity and Pimco Income
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between ICON and Pimco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Icon Equity Income and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income and Icon Equity 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 Equity Income are associated (or correlated) with Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income has no effect on the direction of Icon Equity i.e., Icon Equity and Pimco Income go up and down completely randomly.
Pair Corralation between Icon Equity and Pimco Income
Assuming the 90 days horizon Icon Equity Income is expected to generate 3.93 times more return on investment than Pimco Income. However, Icon Equity is 3.93 times more volatile than Pimco Income Fund. It trades about 0.16 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.18 per unit of risk. If you would invest 1,672 in Icon Equity Income on September 1, 2024 and sell it today you would earn a total of 52.00 from holding Icon Equity Income or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Icon Equity Income vs. Pimco Income Fund
Performance |
| Timeline |
| Icon Equity Income |
| Pimco Income |
Icon Equity and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Equity and Pimco Income
The main advantage of trading using opposite Icon Equity and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Equity position performs unexpectedly, Pimco Income 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 Pimco Income will offset losses from the drop in Pimco Income's long position.| Icon Equity vs. Aquagold International | Icon Equity vs. Thrivent High Yield | Icon Equity vs. Morningstar Unconstrained Allocation | Icon Equity vs. Via Renewables |
| Pimco Income vs. Cutler Equity | Pimco Income vs. Small Cap Equity | Pimco Income vs. Icon Equity Income | Pimco Income vs. The Gabelli Equity |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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