Correlation Between Shenkman Short and Icon Bond

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

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

Diversification Opportunities for Shenkman Short and Icon Bond

0.96

Correlation Coefficient

Shenkman Short  Icon Bond

Almost no diversification

The 3 months correlation between Shenkman and Icon is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shenkman Short Duration 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 Shenkman 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 Shenkman Short Duration 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 Shenkman Short i.e., Shenkman Short and Icon Bond go up and down completely randomly.

Pair Corralation between Shenkman Short and Icon Bond

Assuming the 90 days horizon Shenkman Short is expected to generate 1.16 times less return on investment than Icon Bond. But when comparing it to its historical volatility, Shenkman Short Duration is 1.87 times less risky than Icon Bond. It trades about 0.48 of its potential returns per unit of risk. Icon Bond Fund is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  837.00  in Icon Bond Fund on May 18, 2025 and sell it today you would earn a total of  19.00  from holding Icon Bond Fund or generate 2.27% return on investment over 90 days.

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

Shenkman Short Duration  vs.  Icon Bond Fund

Shenkman Short Duration

Risk-Adjusted Performance

High

Compared to the overall equity markets, risk-adjusted returns on investments in Shenkman Short Duration are ranked lower than 37 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Shenkman Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 Shenkman Short and Icon Bond

The main advantage of trading using opposite Shenkman Short and Icon Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenkman Short 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 Shenkman Short Duration 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.