Correlation Between Icon Natural and Brown Advisory

Can any of the company-specific risk be diversified away by investing in both Icon Natural and Brown Advisory 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 Brown Advisory 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 Brown Advisory Mortgage, you can compare the effects of market volatilities on Icon Natural and Brown Advisory 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 Brown Advisory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Natural and Brown Advisory.

Diversification Opportunities for Icon Natural and Brown Advisory

0.0

Correlation Coefficient

Icon Natural  Brown Advisory

Pay attention - limited upside

The 3 months correlation between Icon and Brown is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Icon Natural Resources and Brown Advisory Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Advisory Mortgage 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 Brown Advisory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Advisory Mortgage has no effect on the direction of Icon Natural i.e., Icon Natural and Brown Advisory go up and down completely randomly.

Pair Corralation between Icon Natural and Brown Advisory

If you would invest  1,778  in Icon Natural Resources on September 3, 2024 and sell it today you would earn a total of  69.00  from holding Icon Natural Resources or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Icon Natural Resources  vs.  Brown Advisory Mortgage

Icon Natural Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Icon Natural Resources are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Icon Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brown Advisory Mortgage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brown Advisory Mortgage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Brown Advisory is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Icon Natural and Brown Advisory

The main advantage of trading using opposite Icon Natural and Brown Advisory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Natural position performs unexpectedly, Brown Advisory 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 Brown Advisory will offset losses from the drop in Brown Advisory's long position.

The idea behind Icon Natural Resources and Brown Advisory Mortgage 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.