Correlation Between Equifax and ICF International
Can any of the company-specific risk be diversified away by investing in both Equifax 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 Equifax and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equifax and ICF International, you can compare the effects of market volatilities on Equifax 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 Equifax with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and ICF International.
Diversification Opportunities for Equifax and ICF International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equifax and ICF is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and Equifax 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 Equifax 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 Equifax i.e., Equifax and ICF International go up and down completely randomly.
Pair Corralation between Equifax and ICF International
Considering the 90-day investment horizon Equifax is expected to generate 0.98 times more return on investment than ICF International. However, Equifax is 1.02 times less risky than ICF International. It trades about 0.05 of its potential returns per unit of risk. ICF International is currently generating about 0.01 per unit of risk. If you would invest 21,209 in Equifax on August 24, 2024 and sell it today you would earn a total of 4,081 from holding Equifax or generate 19.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equifax vs. ICF International
Performance |
| Timeline |
| Equifax |
| ICF International |
Equifax and ICF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equifax and ICF International
The main advantage of trading using opposite Equifax and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equifax 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.| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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