Correlation Between Valic Company and Icon Long/short

Can any of the company-specific risk be diversified away by investing in both Valic Company and Icon Long/short 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 Valic Company and Icon Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Valic Company I and Icon Longshort Fund, you can compare the effects of market volatilities on Valic Company and Icon Long/short 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 Valic Company with a short position of Icon Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Icon Long/short.

Diversification Opportunities for Valic Company and Icon Long/short

0.68

Correlation Coefficient

Valic Company  Icon Long/short

Poor diversification

The 3 months correlation between Valic and Icon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Icon Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Long/short and Valic Company 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 Valic Company I are associated (or correlated) with Icon Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Long/short has no effect on the direction of Valic Company i.e., Valic Company and Icon Long/short go up and down completely randomly.

Pair Corralation between Valic Company and Icon Long/short

Assuming the 90 days horizon Valic Company is expected to generate 1.14 times less return on investment than Icon Long/short. In addition to that, Valic Company is 1.11 times more volatile than Icon Longshort Fund. It trades about 0.13 of its total potential returns per unit of risk. Icon Longshort Fund is currently generating about 0.16 per unit of volatility. If you would invest  2,613  in Icon Longshort Fund on May 17, 2025 and sell it today you would earn a total of  281.00  from holding Icon Longshort Fund or generate 10.75% return on investment over 90 days.

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

Valic Company I  vs.  Icon Longshort Fund

Valic Company I

Risk-Adjusted Performance

Fair

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

Icon Long/short

Risk-Adjusted Performance

Good

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

Pair Trading with Valic Company and Icon Long/short

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

The idea behind Valic Company I and Icon Longshort 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.