Correlation Between Icon Bond and Ab Global
Can any of the company-specific risk be diversified away by investing in both Icon Bond and Ab Global 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 Bond and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Bond Fund and Ab Global Risk, you can compare the effects of market volatilities on Icon Bond and Ab Global 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 Bond with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Bond and Ab Global.
Diversification Opportunities for Icon Bond and Ab Global
Poor diversification
The 3 months correlation between Icon and CABIX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Icon Bond Fund and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk and Icon Bond 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 Bond Fund are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Icon Bond i.e., Icon Bond and Ab Global go up and down completely randomly.
Pair Corralation between Icon Bond and Ab Global
Assuming the 90 days horizon Icon Bond is expected to generate 4.02 times less return on investment than Ab Global. But when comparing it to its historical volatility, Icon Bond Fund is 2.22 times less risky than Ab Global. It trades about 0.12 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,784 in Ab Global Risk on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Ab Global Risk or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Bond Fund vs. Ab Global Risk
Performance |
| Timeline |
| Icon Bond Fund |
| Ab Global Risk |
Icon Bond and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Bond and Ab Global
The main advantage of trading using opposite Icon Bond and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Bond position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Icon Bond vs. Morningstar Defensive Bond | Icon Bond vs. The National Tax Free | Icon Bond vs. Ishares Municipal Bond | Icon Bond vs. Ambrus Core Bond |
| Ab Global vs. Prudential Government Income | Ab Global vs. Dreyfus Government Cash | Ab Global vs. Payden Government Fund | Ab Global vs. Sit Government Securities |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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