Correlation Between Scharf Global and Icon Information
Can any of the company-specific risk be diversified away by investing in both Scharf Global 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 Scharf Global and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Icon Information Technology, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Icon Information.
Diversification Opportunities for Scharf Global and Icon Information
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scharf and Icon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity 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 Scharf Global 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 Global Opportunity 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 Scharf Global i.e., Scharf Global and Icon Information go up and down completely randomly.
Pair Corralation between Scharf Global and Icon Information
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 0.67 times more return on investment than Icon Information. However, Scharf Global Opportunity is 1.5 times less risky than Icon Information. It trades about 0.08 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.03 per unit of risk. If you would invest 2,936 in Scharf Global Opportunity on September 5, 2024 and sell it today you would earn a total of 863.00 from holding Scharf Global Opportunity or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Icon Information Technology
Performance |
| Timeline |
| Scharf Global Opportunity |
| Icon Information Tec |
Scharf Global and Icon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Icon Information
The main advantage of trading using opposite Scharf Global and Icon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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.| Scharf Global vs. Small Cap Equity | Scharf Global vs. Sarofim Equity | Scharf Global vs. Us Vector Equity | Scharf Global vs. Scharf Fund Retail |
| Icon Information vs. Fidelity Capital Income | Icon Information vs. Pace High Yield | Icon Information vs. Guggenheim High Yield | Icon Information vs. Blackrock 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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