Correlation Between Mutual Of and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Mutual Of and Icon Financial 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 Mutual Of and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Icon Financial Fund, you can compare the effects of market volatilities on Mutual Of and Icon Financial 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 Mutual Of with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Icon Financial.
Diversification Opportunities for Mutual Of and Icon Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mutual and Icon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Mutual Of 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 Mutual Of America are associated (or correlated) with Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Mutual Of i.e., Mutual Of and Icon Financial go up and down completely randomly.
Pair Corralation between Mutual Of and Icon Financial
Assuming the 90 days horizon Mutual Of America is expected to under-perform the Icon Financial. In addition to that, Mutual Of is 1.38 times more volatile than Icon Financial Fund. It trades about -0.32 of its total potential returns per unit of risk. Icon Financial Fund is currently generating about -0.21 per unit of volatility. If you would invest 992.00 in Icon Financial Fund on October 5, 2024 and sell it today you would lose (38.00) from holding Icon Financial Fund or give up 3.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Mutual Of America vs. Icon Financial Fund
Performance |
Timeline |
Mutual Of America |
Icon Financial |
Mutual Of and Icon Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mutual Of and Icon Financial
The main advantage of trading using opposite Mutual Of and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of position performs unexpectedly, Icon Financial 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 Financial will offset losses from the drop in Icon Financial's long position.Mutual Of vs. Fidelity Small Cap | Mutual Of vs. Mutual Of America | Mutual Of vs. Ab Small Cap | Mutual Of vs. Small Cap Value |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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