Correlation Between Icon Long/short and Icon Equity
Can any of the company-specific risk be diversified away by investing in both Icon Long/short and Icon Equity 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 Long/short and Icon Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Longshort Fund and Icon Equity Income, you can compare the effects of market volatilities on Icon Long/short and Icon Equity 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 Long/short with a short position of Icon Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Long/short and Icon Equity.
Diversification Opportunities for Icon Long/short and Icon Equity
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Icon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Icon Longshort Fund and Icon Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Equity Income and Icon Long/short 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 Longshort Fund are associated (or correlated) with Icon Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Equity Income has no effect on the direction of Icon Long/short i.e., Icon Long/short and Icon Equity go up and down completely randomly.
Pair Corralation between Icon Long/short and Icon Equity
Assuming the 90 days horizon Icon Longshort Fund is expected to generate 1.01 times more return on investment than Icon Equity. However, Icon Long/short is 1.01 times more volatile than Icon Equity Income. It trades about 0.27 of its potential returns per unit of risk. Icon Equity Income is currently generating about 0.21 per unit of risk. If you would invest 2,453 in Icon Longshort Fund on November 8, 2024 and sell it today you would earn a total of 122.00 from holding Icon Longshort Fund or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Icon Longshort Fund vs. Icon Equity Income
Performance |
| Timeline |
| Icon Long/short |
| Icon Equity Income |
Icon Long/short and Icon Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Long/short and Icon Equity
The main advantage of trading using opposite Icon Long/short and Icon Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Long/short position performs unexpectedly, Icon Equity 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 Icon Equity will offset losses from the drop in Icon Equity's long position.| Icon Long/short vs. Icon Bond Fund | Icon Long/short vs. Icon Bond Fund | Icon Long/short vs. Icon Equity Income | Icon Long/short vs. Icon Longshort Fund |
| Icon Equity vs. Metropolitan West High | Icon Equity vs. Barings High Yield | Icon Equity vs. Calamos High Income | Icon Equity vs. Intal High Relative |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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