Correlation Between Icon Information and Lsv Conservative

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

By analyzing existing cross correlation between Icon Information Technology and Lsv Servative Value, you can compare the effects of market volatilities on Icon Information and Lsv Conservative 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 Information with a short position of Lsv Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Lsv Conservative.

Diversification Opportunities for Icon Information and Lsv Conservative

0.37

Correlation Coefficient

Icon Information  Lsv Conservative

Weak diversification

The 3 months correlation between Icon and Lsv is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology and Lsv Servative Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Servative Value and Icon Information 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 Information Technology are associated (or correlated) with Lsv Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Servative Value has no effect on the direction of Icon Information i.e., Icon Information and Lsv Conservative go up and down completely randomly.

Pair Corralation between Icon Information and Lsv Conservative

Assuming the 90 days horizon Icon Information Technology is expected to under-perform the Lsv Conservative. But the mutual fund apears to be less risky and, when comparing its historical volatility, Icon Information Technology is 1.33 times less risky than Lsv Conservative. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Lsv Servative Value is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,475  in Lsv Servative Value on December 18, 2024 and sell it today you would lose (123.00) from holding Lsv Servative Value or give up 8.34% of portfolio value over 90 days.

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

Icon Information Technology  vs.  Lsv Servative Value

Icon Information Tec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Icon Information Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Lsv Servative Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lsv Servative Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Icon Information and Lsv Conservative

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

The idea behind Icon Information Technology and Lsv Servative Value 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.