Correlation Between Driven Brands and ICF International
Can any of the company-specific risk be diversified away by investing in both Driven Brands and ICF 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 Driven Brands and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driven Brands Holdings and ICF International, you can compare the effects of market volatilities on Driven Brands and ICF 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 Driven Brands with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and ICF International.
Diversification Opportunities for Driven Brands and ICF International
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Driven and ICF is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with ICF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICF International has no effect on the direction of Driven Brands i.e., Driven Brands and ICF International go up and down completely randomly.
Pair Corralation between Driven Brands and ICF International
Given the investment horizon of 90 days Driven Brands Holdings is expected to under-perform the ICF International. In addition to that, Driven Brands is 1.75 times more volatile than ICF International. It trades about -0.02 of its total potential returns per unit of risk. ICF International is currently generating about 0.03 per unit of volatility. If you would invest 10,981 in ICF International on August 24, 2024 and sell it today you would earn a total of 2,572 from holding ICF International or generate 23.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Driven Brands Holdings vs. ICF International
Performance |
| Timeline |
| Driven Brands Holdings |
| ICF International |
Driven Brands and ICF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and ICF International
The main advantage of trading using opposite Driven Brands and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, ICF 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 ICF International will offset losses from the drop in ICF International's long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| ICF International vs. Forrester Research | ICF International vs. Huron Consulting Group | ICF International vs. Franklin Covey | ICF International vs. FTI Consulting |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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