Correlation Between Icon Natural and Prudential High
Can any of the company-specific risk be diversified away by investing in both Icon Natural and Prudential High 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 Prudential High 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 Prudential High Yield, you can compare the effects of market volatilities on Icon Natural and Prudential High 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 Prudential High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Prudential High.
Diversification Opportunities for Icon Natural and Prudential High
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Icon and Prudential is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Prudential High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential High Yield 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 Prudential High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential High Yield has no effect on the direction of Icon Natural i.e., Icon Natural and Prudential High go up and down completely randomly.
Pair Corralation between Icon Natural and Prudential High
Assuming the 90 days horizon Icon Natural Resources is expected to generate 6.09 times more return on investment than Prudential High. However, Icon Natural is 6.09 times more volatile than Prudential High Yield. It trades about 0.24 of its potential returns per unit of risk. Prudential High Yield is currently generating about 0.41 per unit of risk. If you would invest 1,478 in Icon Natural Resources on April 22, 2025 and sell it today you would earn a total of 259.00 from holding Icon Natural Resources or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Natural Resources vs. Prudential High Yield
Performance |
| Timeline |
| Icon Natural Resources |
| Prudential High Yield |
Icon Natural and Prudential High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Natural and Prudential High
The main advantage of trading using opposite Icon Natural and Prudential High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Prudential High 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 Prudential High will offset losses from the drop in Prudential High's long position.| Icon Natural vs. Icon Financial Fund | Icon Natural vs. Dreyfus Natural Resources | Icon Natural vs. Icon Natural Resources | Icon Natural vs. Icon Information Technology |
| Prudential High vs. 1919 Financial Services | Prudential High vs. Gabelli Global Financial | Prudential High vs. Rmb Mendon Financial | Prudential High vs. Goldman Sachs Financial |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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