Correlation Between Icon Natural and American Beacon
Can any of the company-specific risk be diversified away by investing in both Icon Natural and American Beacon 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 American Beacon 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 American Beacon Balanced, you can compare the effects of market volatilities on Icon Natural and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and American Beacon.
Diversification Opportunities for Icon Natural and American Beacon
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Icon and American is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and American Beacon Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Balanced 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Balanced has no effect on the direction of Icon Natural i.e., Icon Natural and American Beacon go up and down completely randomly.
Pair Corralation between Icon Natural and American Beacon
Assuming the 90 days horizon Icon Natural Resources is expected to under-perform the American Beacon. In addition to that, Icon Natural is 3.41 times more volatile than American Beacon Balanced. It trades about -0.01 of its total potential returns per unit of risk. American Beacon Balanced is currently generating about 0.08 per unit of volatility. If you would invest 1,547 in American Beacon Balanced on September 6, 2025 and sell it today you would earn a total of 38.00 from holding American Beacon Balanced or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. American Beacon Balanced
Performance |
| Timeline |
| Icon Natural Resources |
| American Beacon Balanced |
Icon Natural and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and American Beacon
The main advantage of trading using opposite Icon Natural and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Icon Natural vs. Knights Of Umbus | Icon Natural vs. Legg Mason Bw | Icon Natural vs. American Century Etf | Icon Natural vs. Qs Large Cap |
| American Beacon vs. Fidelity Managed Retirement | American Beacon vs. T Rowe Price | American Beacon vs. Franklin Lifesmart 2045 | American Beacon vs. T Rowe Price |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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