Correlation Between Icon Financial and Voya Emerging

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

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

Diversification Opportunities for Icon Financial and Voya Emerging

-0.02

Correlation Coefficient

Icon Financial  Voya Emerging

Good diversification

The 3 months correlation between Icon and Voya is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Voya Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Emerging Markets and Icon Financial 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 Financial Fund are associated (or correlated) with Voya Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Emerging Markets has no effect on the direction of Icon Financial i.e., Icon Financial and Voya Emerging go up and down completely randomly.

Pair Corralation between Icon Financial and Voya Emerging

Assuming the 90 days horizon Icon Financial Fund is expected to under-perform the Voya Emerging. In addition to that, Icon Financial Fund is as risky as Voya Emerging. It trades about -0.06 of its total potential returns per unit of risk. Voya Emerging Markets is currently generating about 0.12 per unit of volatility. If you would invest  997.00  in Voya Emerging Markets on December 19, 2024 and sell it today you would earn a total of  67.00  from holding Voya Emerging Markets or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Icon Financial Fund  vs.  Voya Emerging Markets

Icon Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icon Financial Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Icon Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Emerging Markets

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Emerging Markets are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Voya Emerging may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Icon Financial and Voya Emerging

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

The idea behind Icon Financial Fund and Voya Emerging Markets 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.