Correlation Between Mid Cap and Icon Financial

Can any of the company-specific risk be diversified away by investing in both Mid Cap 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 Mid Cap and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mid Cap Value and Icon Financial Fund, you can compare the effects of market volatilities on Mid Cap 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 Mid Cap with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Icon Financial.

Diversification Opportunities for Mid Cap and Icon Financial

0.94

Correlation Coefficient

Mid Cap  Icon Financial

Almost no diversification

The 3 months correlation between Mid and Icon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Value and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Mid Cap 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 Mid Cap Value 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 Mid Cap i.e., Mid Cap and Icon Financial go up and down completely randomly.

Pair Corralation between Mid Cap and Icon Financial

Assuming the 90 days horizon Mid Cap Value is expected to generate 0.89 times more return on investment than Icon Financial. However, Mid Cap Value is 1.13 times less risky than Icon Financial. It trades about 0.16 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.14 per unit of risk. If you would invest  1,556  in Mid Cap Value on June 1, 2025 and sell it today you would earn a total of  127.00  from holding Mid Cap Value or generate 8.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Mid Cap Value  vs.  Icon Financial Fund

Mid Cap Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Cap Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Mid Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Icon Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Financial Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mid Cap and Icon Financial

The main advantage of trading using opposite Mid Cap and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap 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.

The idea behind Mid Cap Value and Icon Financial Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.