Correlation Between Midcap Growth and Icon Natural
Can any of the company-specific risk be diversified away by investing in both Midcap Growth and Icon 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 Midcap Growth and Icon Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midcap Growth Fund and Icon Natural Resources, you can compare the effects of market volatilities on Midcap Growth and Icon 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 Midcap Growth with a short position of Icon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midcap Growth and Icon Natural.
Diversification Opportunities for Midcap Growth and Icon Natural
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Midcap and Icon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Midcap Growth Fund and Icon Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Natural Resources and Midcap Growth 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 Midcap Growth Fund are associated (or correlated) with Icon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Natural Resources has no effect on the direction of Midcap Growth i.e., Midcap Growth and Icon Natural go up and down completely randomly.
Pair Corralation between Midcap Growth and Icon Natural
Assuming the 90 days horizon Midcap Growth Fund is expected to generate 1.14 times more return on investment than Icon Natural. However, Midcap Growth is 1.14 times more volatile than Icon Natural Resources. It trades about 0.25 of its potential returns per unit of risk. Icon Natural Resources is currently generating about 0.18 per unit of risk. If you would invest 921.00 in Midcap Growth Fund on April 5, 2025 and sell it today you would earn a total of 325.00 from holding Midcap Growth Fund or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Midcap Growth Fund vs. Icon Natural Resources
Performance |
| Timeline |
| Midcap Growth |
| Icon Natural Resources |
Midcap Growth and Icon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midcap Growth and Icon Natural
The main advantage of trading using opposite Midcap Growth and Icon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midcap Growth position performs unexpectedly, Icon 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 Icon Natural will offset losses from the drop in Icon Natural's long position.| Midcap Growth vs. Schwab Health Care | Midcap Growth vs. Allianzgi Health Sciences | Midcap Growth vs. The Hartford Healthcare | Midcap Growth vs. Putnam Global Health |
| Icon Natural vs. Franklin Gold Precious | Icon Natural vs. Goldman Sachs Technology | Icon Natural vs. Gabelli Gold Fund | Icon Natural vs. World Precious Minerals |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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