Correlation Between Icon Financial and Ultrashort Japan
Can any of the company-specific risk be diversified away by investing in both Icon Financial and Ultrashort Japan 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 Financial and Ultrashort Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Financial Fund and Ultrashort Japan Profund, you can compare the effects of market volatilities on Icon Financial and Ultrashort Japan 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 Financial with a short position of Ultrashort Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Financial and Ultrashort Japan.
Diversification Opportunities for Icon Financial and Ultrashort Japan
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Icon and Ultrashort is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Icon Financial Fund and Ultrashort Japan Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrashort Japan Profund and Icon Financial 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 Financial Fund are associated (or correlated) with Ultrashort Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrashort Japan Profund has no effect on the direction of Icon Financial i.e., Icon Financial and Ultrashort Japan go up and down completely randomly.
Pair Corralation between Icon Financial and Ultrashort Japan
Assuming the 90 days horizon Icon Financial Fund is expected to generate 0.37 times more return on investment than Ultrashort Japan. However, Icon Financial Fund is 2.72 times less risky than Ultrashort Japan. It trades about 0.18 of its potential returns per unit of risk. Ultrashort Japan Profund is currently generating about -0.14 per unit of risk. If you would invest 871.00 in Icon Financial Fund on May 1, 2025 and sell it today you would earn a total of 92.00 from holding Icon Financial Fund or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Financial Fund vs. Ultrashort Japan Profund
Performance |
| Timeline |
| Icon Financial |
| Ultrashort Japan Profund |
Icon Financial and Ultrashort Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Financial and Ultrashort Japan
The main advantage of trading using opposite Icon Financial and Ultrashort Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Financial position performs unexpectedly, Ultrashort Japan 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 Ultrashort Japan will offset losses from the drop in Ultrashort Japan's long position.The idea behind Icon Financial Fund and Ultrashort Japan Profund 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.| Ultrashort Japan vs. Inverse Government Long | Ultrashort Japan vs. Hsbc Government Money | Ultrashort Japan vs. Alliancebernstein Bond | Ultrashort Japan vs. Blackrock Government Bond |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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