Correlation Between American Beacon and Icon Utilities
Can any of the company-specific risk be diversified away by investing in both American Beacon and Icon Utilities 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 American Beacon and Icon Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Soundpointfltrtinc and Icon Utilities Fund, you can compare the effects of market volatilities on American Beacon and Icon Utilities 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 American Beacon with a short position of Icon Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Icon Utilities.
Diversification Opportunities for American Beacon and Icon Utilities
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Icon is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Soundpointfltr and Icon Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Utilities and American Beacon 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 American Beacon Soundpointfltrtinc are associated (or correlated) with Icon Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Utilities has no effect on the direction of American Beacon i.e., American Beacon and Icon Utilities go up and down completely randomly.
Pair Corralation between American Beacon and Icon Utilities
Assuming the 90 days horizon American Beacon Soundpointfltrtinc is expected to under-perform the Icon Utilities. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Beacon Soundpointfltrtinc is 7.39 times less risky than Icon Utilities. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Icon Utilities Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Icon Utilities Fund on August 26, 2025 and sell it today you would earn a total of 35.00 from holding Icon Utilities Fund or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Soundpointfltr vs. Icon Utilities Fund
Performance |
| Timeline |
| American Beacon Soun |
| Icon Utilities |
American Beacon and Icon Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Icon Utilities
The main advantage of trading using opposite American Beacon and Icon Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Icon Utilities 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 Utilities will offset losses from the drop in Icon Utilities' long position.| American Beacon vs. Nuveen Large Cap | American Beacon vs. T Rowe Price | American Beacon vs. Dana Large Cap | American Beacon vs. Prudential Qma Large Cap |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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