Correlation Between Smallcap Growth and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Smallcap Growth 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 Smallcap Growth and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smallcap Growth Fund and Icon Financial Fund, you can compare the effects of market volatilities on Smallcap Growth 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 Smallcap Growth with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Growth and Icon Financial.
Diversification Opportunities for Smallcap Growth and Icon Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Smallcap and Icon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Growth Fund and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Smallcap Growth 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 Smallcap Growth Fund 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 Smallcap Growth i.e., Smallcap Growth and Icon Financial go up and down completely randomly.
Pair Corralation between Smallcap Growth and Icon Financial
Assuming the 90 days horizon Smallcap Growth Fund is expected to generate 0.99 times more return on investment than Icon Financial. However, Smallcap Growth Fund is 1.01 times less risky than Icon Financial. It trades about 0.05 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.01 per unit of risk. If you would invest 1,392 in Smallcap Growth Fund on September 12, 2024 and sell it today you would earn a total of 304.00 from holding Smallcap Growth Fund or generate 21.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smallcap Growth Fund vs. Icon Financial Fund
Performance |
| Timeline |
| Smallcap Growth |
| Icon Financial |
Smallcap Growth and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smallcap Growth and Icon Financial
The main advantage of trading using opposite Smallcap Growth and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Growth 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.| Smallcap Growth vs. Allianzgi Diversified Income | Smallcap Growth vs. Global Diversified Income | Smallcap Growth vs. Aqr Diversified Arbitrage | Smallcap Growth vs. Guggenheim Diversified Income |
| Icon Financial vs. T Rowe Price | Icon Financial vs. Rational Defensive Growth | Icon Financial vs. Franklin Growth Opportunities | Icon Financial vs. Smallcap Growth Fund |
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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