Correlation Between CompX International and ICTS International
Can any of the company-specific risk be diversified away by investing in both CompX International and ICTS International 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 CompX International and ICTS International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompX International and ICTS International NV, you can compare the effects of market volatilities on CompX International and ICTS International 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 CompX International with a short position of ICTS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompX International and ICTS International.
Diversification Opportunities for CompX International and ICTS International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between CompX and ICTS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CompX International and ICTS International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICTS International and CompX International 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 CompX International are associated (or correlated) with ICTS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICTS International has no effect on the direction of CompX International i.e., CompX International and ICTS International go up and down completely randomly.
Pair Corralation between CompX International and ICTS International
Considering the 90-day investment horizon CompX International is expected to generate 1.03 times more return on investment than ICTS International. However, CompX International is 1.03 times more volatile than ICTS International NV. It trades about 0.07 of its potential returns per unit of risk. ICTS International NV is currently generating about -0.04 per unit of risk. If you would invest 2,112 in CompX International on September 2, 2024 and sell it today you would earn a total of 649.00 from holding CompX International or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompX International vs. ICTS International NV
Performance |
| Timeline |
| CompX International |
| ICTS International |
CompX International and ICTS International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompX International and ICTS International
The main advantage of trading using opposite CompX International and ICTS International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompX International position performs unexpectedly, ICTS International 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 ICTS International will offset losses from the drop in ICTS International's long position.| CompX International vs. NL Industries | CompX International vs. Eastern Co | CompX International vs. CF Financial | CompX International vs. Bar Harbor Bankshares |
| ICTS International vs. Seychelle Environmtl | ICTS International vs. Energy and Water | ICTS International vs. One World Universe | ICTS International vs. Vow ASA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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