Correlation Between Scharf Fund and Icon Equity
Can any of the company-specific risk be diversified away by investing in both Scharf Fund 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 Scharf Fund and Icon Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and Icon Equity Income, you can compare the effects of market volatilities on Scharf Fund 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 Scharf Fund with a short position of Icon Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Icon Equity.
Diversification Opportunities for Scharf Fund and Icon Equity
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Icon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail 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 Scharf Fund 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 Scharf Fund Retail 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 Scharf Fund i.e., Scharf Fund and Icon Equity go up and down completely randomly.
Pair Corralation between Scharf Fund and Icon Equity
Assuming the 90 days horizon Scharf Fund Retail is expected to generate 1.22 times more return on investment than Icon Equity. However, Scharf Fund is 1.22 times more volatile than Icon Equity Income. It trades about 0.07 of its potential returns per unit of risk. Icon Equity Income is currently generating about 0.07 per unit of risk. If you would invest 4,880 in Scharf Fund Retail on September 4, 2024 and sell it today you would earn a total of 883.00 from holding Scharf Fund Retail or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Scharf Fund Retail vs. Icon Equity Income
Performance |
| Timeline |
| Scharf Fund Retail |
| Icon Equity Income |
Scharf Fund and Icon Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Icon Equity
The main advantage of trading using opposite Scharf Fund and Icon Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund 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.| Scharf Fund vs. Dana Large Cap | Scharf Fund vs. Qs Large Cap | Scharf Fund vs. Avantis Large Cap | Scharf Fund vs. Fidelity Series 1000 |
| Icon Equity vs. Icon Equity Income | Icon Equity vs. American Beacon Balanced | Icon Equity vs. Lord Abbett Value | Icon Equity vs. Victory Floating Rate |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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