Correlation Between Select Us and Icon Information
Can any of the company-specific risk be diversified away by investing in both Select Us and Icon Information 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 Select Us and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Equity Fund and Icon Information Technology, you can compare the effects of market volatilities on Select Us and Icon Information 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 Select Us with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Us and Icon Information.
Diversification Opportunities for Select Us and Icon Information
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Select and Icon is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Select Equity Fund and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec and Select Us 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 Select Equity Fund are associated (or correlated) with Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Select Us i.e., Select Us and Icon Information go up and down completely randomly.
Pair Corralation between Select Us and Icon Information
Assuming the 90 days horizon Select Equity Fund is expected to generate 0.78 times more return on investment than Icon Information. However, Select Equity Fund is 1.29 times less risky than Icon Information. It trades about 0.18 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.09 per unit of risk. If you would invest 1,971 in Select Equity Fund on August 25, 2024 and sell it today you would earn a total of 70.00 from holding Select Equity Fund or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Select Equity Fund vs. Icon Information Technology
Performance |
| Timeline |
| Select Equity |
| Icon Information Tec |
Select Us and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Us and Icon Information
The main advantage of trading using opposite Select Us and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Us position performs unexpectedly, Icon Information 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 Information will offset losses from the drop in Icon Information's long position.| Select Us vs. Icon Information Technology | Select Us vs. Mfs Technology Fund | Select Us vs. Red Oak Technology | Select Us vs. Towpath Technology |
| Icon Information vs. VEEA | Icon Information vs. VivoPower International PLC | Icon Information vs. WEBTOON Entertainment Common | Icon Information vs. Icon Bond 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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