Correlation Between Icon Natural and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Sterling Capital 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 Sterling Capital 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 Sterling Capital Mid, you can compare the effects of market volatilities on Icon Natural and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Sterling Capital.
Diversification Opportunities for Icon Natural and Sterling Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Icon and Sterling is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Mid has no effect on the direction of Icon Natural i.e., Icon Natural and Sterling Capital go up and down completely randomly.
Pair Corralation between Icon Natural and Sterling Capital
Assuming the 90 days horizon Icon Natural Resources is expected to under-perform the Sterling Capital. In addition to that, Icon Natural is 1.67 times more volatile than Sterling Capital Mid. It trades about -0.03 of its total potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.02 per unit of volatility. If you would invest 1,487 in Sterling Capital Mid on December 28, 2024 and sell it today you would earn a total of 14.00 from holding Sterling Capital Mid or generate 0.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Icon Natural Resources vs. Sterling Capital Mid
Performance |
Timeline |
Icon Natural Resources |
Sterling Capital Mid |
Icon Natural and Sterling Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Icon Natural and Sterling Capital
The main advantage of trading using opposite Icon Natural and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Icon Information Technology |
Sterling Capital vs. Fidelity Sai Convertible | Sterling Capital vs. Gabelli Convertible And | Sterling Capital vs. Virtus Convertible | Sterling Capital vs. Absolute Convertible Arbitrage |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |