Correlation Between Inverse High and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Inverse High 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 Inverse High and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse High Yield and Icon Financial Fund, you can compare the effects of market volatilities on Inverse High 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 Inverse High with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse High and Icon Financial.
Diversification Opportunities for Inverse High and Icon Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inverse and Icon is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Inverse High Yield and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Inverse High 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 Inverse High Yield 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 Inverse High i.e., Inverse High and Icon Financial go up and down completely randomly.
Pair Corralation between Inverse High and Icon Financial
Assuming the 90 days horizon Inverse High Yield is expected to generate 0.41 times more return on investment than Icon Financial. However, Inverse High Yield is 2.46 times less risky than Icon Financial. It trades about 0.3 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.23 per unit of risk. If you would invest 4,941 in Inverse High Yield on October 15, 2024 and sell it today you would earn a total of 111.00 from holding Inverse High Yield or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse High Yield vs. Icon Financial Fund
Performance |
| Timeline |
| Inverse High Yield |
| Icon Financial |
Inverse High and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse High and Icon Financial
The main advantage of trading using opposite Inverse High and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse High 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.| Inverse High vs. Mutual Of America | Inverse High vs. Ultrasmall Cap Profund Ultrasmall Cap | Inverse High vs. Great West Loomis Sayles | Inverse High vs. Amg River Road |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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