Correlation Between Yuanbao American and Icon Bond

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

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

Diversification Opportunities for Yuanbao American and Icon Bond

0.65

Correlation Coefficient

Yuanbao American  Icon Bond

Poor diversification

The 3 months correlation between Yuanbao and Icon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Yuanbao American Depositary 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 Yuanbao American 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 Yuanbao American Depositary 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 Yuanbao American i.e., Yuanbao American and Icon Bond go up and down completely randomly.

Pair Corralation between Yuanbao American and Icon Bond

Allowing for the 90-day total investment horizon Yuanbao American Depositary is expected to generate 43.62 times more return on investment than Icon Bond. However, Yuanbao American is 43.62 times more volatile than Icon Bond Fund. It trades about 0.14 of its potential returns per unit of risk. Icon Bond Fund is currently generating about -0.11 per unit of risk. If you would invest  2,222  in Yuanbao American Depositary on May 4, 2025 and sell it today you would earn a total of  386.00  from holding Yuanbao American Depositary or generate 17.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Yuanbao American Depositary  vs.  Icon Bond Fund

Yuanbao American Dep

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yuanbao American Depositary are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Yuanbao American sustained solid returns over the last few months and may actually be approaching a breakup point.

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 17 (%) 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 Yuanbao American and Icon Bond

The main advantage of trading using opposite Yuanbao American and Icon Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanbao American 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 Yuanbao American Depositary 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.