Correlation Between Icon Bond and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Icon Bond and Hartford Healthcare 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 Hartford Healthcare 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 Hartford Healthcare Hls, you can compare the effects of market volatilities on Icon Bond and Hartford Healthcare 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 Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Bond and Hartford Healthcare.
Diversification Opportunities for Icon Bond and Hartford Healthcare
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icon and Hartford is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Icon Bond Fund and Hartford Healthcare Hls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Healthcare Hls 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 Hartford Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Healthcare Hls has no effect on the direction of Icon Bond i.e., Icon Bond and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Icon Bond and Hartford Healthcare
Assuming the 90 days horizon Icon Bond Fund is expected to generate 0.22 times more return on investment than Hartford Healthcare. However, Icon Bond Fund is 4.48 times less risky than Hartford Healthcare. It trades about 0.2 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about 0.03 per unit of risk. If you would invest 771.00 in Icon Bond Fund on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Icon Bond Fund or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Bond Fund vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Icon Bond Fund |
| Hartford Healthcare Hls |
Icon Bond and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Bond and Hartford Healthcare
The main advantage of trading using opposite Icon Bond and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Bond position performs unexpectedly, Hartford Healthcare 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 Hartford Healthcare will offset losses from the drop in Hartford Healthcare's long position.| Icon Bond vs. Delaware Limited Term Diversified | Icon Bond vs. Calvert Conservative Allocation | Icon Bond vs. Huber Capital Diversified | Icon Bond vs. Fidelity Advisor Diversified |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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