Correlation Between Icon Natural and First Eagle

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

By analyzing existing cross correlation between Icon Natural Resources and First Eagle Smid, you can compare the effects of market volatilities on Icon Natural and First Eagle 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 Icon Natural with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and First Eagle.

Diversification Opportunities for Icon Natural and First Eagle

0.94

Correlation Coefficient

Icon Natural  First Eagle

Almost no diversification

The 3 months correlation between Icon and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and First Eagle Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Smid and Icon Natural 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 Icon Natural Resources are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Smid has no effect on the direction of Icon Natural i.e., Icon Natural and First Eagle go up and down completely randomly.

Pair Corralation between Icon Natural and First Eagle

Assuming the 90 days horizon Icon Natural Resources is expected to generate 1.14 times more return on investment than First Eagle. However, Icon Natural is 1.14 times more volatile than First Eagle Smid. It trades about 0.2 of its potential returns per unit of risk. First Eagle Smid is currently generating about 0.2 per unit of risk. If you would invest  1,550  in Icon Natural Resources on May 3, 2025 and sell it today you would earn a total of  220.00  from holding Icon Natural Resources or generate 14.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Icon Natural Resources  vs.  First Eagle Smid

Icon Natural Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Natural Resources are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Icon Natural showed solid returns over the last few months and may actually be approaching a breakup point.

First Eagle Smid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Smid are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Icon Natural and First Eagle

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

The idea behind Icon Natural Resources and First Eagle Smid 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.