Correlation Between Icon Long/short and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Icon Long/short 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 Icon Long/short and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Longshort Fund and Icon Financial Fund, you can compare the effects of market volatilities on Icon Long/short 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 Icon Long/short with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Long/short and Icon Financial.
Diversification Opportunities for Icon Long/short and Icon Financial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Icon and Icon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Icon Longshort Fund and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Icon Long/short 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 Longshort Fund 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 Icon Long/short i.e., Icon Long/short and Icon Financial go up and down completely randomly.
Pair Corralation between Icon Long/short and Icon Financial
Assuming the 90 days horizon Icon Longshort Fund is expected to generate 1.14 times more return on investment than Icon Financial. However, Icon Long/short is 1.14 times more volatile than Icon Financial Fund. It trades about 0.29 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.19 per unit of risk. If you would invest 2,171 in Icon Longshort Fund on April 25, 2025 and sell it today you would earn a total of 452.00 from holding Icon Longshort Fund or generate 20.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Icon Longshort Fund vs. Icon Financial Fund
Performance |
Timeline |
Icon Long/short |
Icon Financial |
Icon Long/short and Icon Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Icon Long/short and Icon Financial
The main advantage of trading using opposite Icon Long/short and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Long/short 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.Icon Long/short vs. Boston Partners Longshort | Icon Long/short vs. Diamond Hill Long Short | Icon Long/short vs. Jpmorgan Research Market | Icon Long/short vs. Calamos Market Neutral |
Icon Financial vs. Cref Money Market | Icon Financial vs. Putnam Money Market | Icon Financial vs. Aig Government Money | Icon Financial vs. First American Funds |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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