Correlation Between Lgm Risk and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Lgm Risk and Icon Financial 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 Lgm Risk and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Icon Financial Fund, you can compare the effects of market volatilities on Lgm Risk and Icon Financial 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 Lgm Risk with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Icon Financial.
Diversification Opportunities for Lgm Risk and Icon Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lgm and Icon is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Lgm Risk 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 Lgm Risk Managed are associated (or correlated) with Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Lgm Risk i.e., Lgm Risk and Icon Financial go up and down completely randomly.
Pair Corralation between Lgm Risk and Icon Financial
Assuming the 90 days horizon Lgm Risk Managed is expected to generate 0.42 times more return on investment than Icon Financial. However, Lgm Risk Managed is 2.4 times less risky than Icon Financial. It trades about -0.34 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.21 per unit of risk. If you would invest 1,153 in Lgm Risk Managed on October 16, 2024 and sell it today you would lose (30.00) from holding Lgm Risk Managed or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lgm Risk Managed vs. Icon Financial Fund
Performance |
| Timeline |
| Lgm Risk Managed |
| Icon Financial |
Lgm Risk and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Icon Financial
The main advantage of trading using opposite Lgm Risk and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk position performs unexpectedly, Icon Financial 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 Financial will offset losses from the drop in Icon Financial's long position.| Lgm Risk vs. Siit Equity Factor | Lgm Risk vs. Locorr Dynamic Equity | Lgm Risk vs. Ab Select Equity | Lgm Risk vs. T Rowe Price |
| Icon Financial vs. Barings High Yield | Icon Financial vs. Siit High Yield | Icon Financial vs. Lgm Risk Managed | Icon Financial vs. Msift High Yield |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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