Correlation Between Dana Large and Icon Bond

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

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

Diversification Opportunities for Dana Large and Icon Bond

0.69

Correlation Coefficient

Dana Large  Icon Bond

Poor diversification

The 3 months correlation between Dana and Icon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Icon Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Bond Fund and Dana Large 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 Dana Large Cap are associated (or correlated) with Icon Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Bond Fund has no effect on the direction of Dana Large i.e., Dana Large and Icon Bond go up and down completely randomly.

Pair Corralation between Dana Large and Icon Bond

Assuming the 90 days horizon Dana Large Cap is expected to generate 5.76 times more return on investment than Icon Bond. However, Dana Large is 5.76 times more volatile than Icon Bond Fund. It trades about 0.18 of its potential returns per unit of risk. Icon Bond Fund is currently generating about 0.3 per unit of risk. If you would invest  2,191  in Dana Large Cap on May 18, 2025 and sell it today you would earn a total of  182.00  from holding Dana Large Cap or generate 8.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Dana Large Cap  vs.  Icon Bond Fund

Dana Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Dana Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Icon Bond Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Bond Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Icon Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dana Large and Icon Bond

The main advantage of trading using opposite Dana Large and Icon Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Icon Bond 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 Bond will offset losses from the drop in Icon Bond's long position.

The idea behind Dana Large Cap and Icon Bond 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.