Correlation Between Icon Bond and Thrivent Natural

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

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

Diversification Opportunities for Icon Bond and Thrivent Natural

0.39

Correlation Coefficient

Icon Bond  Thrivent Natural

Weak diversification

The 3 months correlation between Icon and Thrivent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Icon Bond Fund and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res and Icon Bond 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 Bond Fund are associated (or correlated) with Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of Icon Bond i.e., Icon Bond and Thrivent Natural go up and down completely randomly.

Pair Corralation between Icon Bond and Thrivent Natural

Assuming the 90 days horizon Icon Bond Fund is expected to generate 0.4 times more return on investment than Thrivent Natural. However, Icon Bond Fund is 2.49 times less risky than Thrivent Natural. It trades about -0.23 of its potential returns per unit of risk. Thrivent Natural Resources is currently generating about -0.14 per unit of risk. If you would invest  868.00  in Icon Bond Fund on October 9, 2024 and sell it today you would lose (6.00) from holding Icon Bond Fund or give up 0.69% of portfolio value over 90 days.

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

Icon Bond Fund  vs.  Thrivent Natural Resources

Icon Bond Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icon Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. 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.

Thrivent Natural Res

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Icon Bond and Thrivent Natural

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

The idea behind Icon Bond Fund and Thrivent Natural Resources 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 Stocks Directory module to find actively traded stocks across global markets.