Correlation Between ICC Holdings and Allegheny Technologies
Can any of the company-specific risk be diversified away by investing in both ICC Holdings and Allegheny Technologies 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 ICC Holdings and Allegheny Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and Allegheny Technologies Incorporated, you can compare the effects of market volatilities on ICC Holdings and Allegheny Technologies 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 ICC Holdings with a short position of Allegheny Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Allegheny Technologies.
Diversification Opportunities for ICC Holdings and Allegheny Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICC and Allegheny is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and Allegheny Technologies Incorpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegheny Technologies and ICC Holdings 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 ICC Holdings are associated (or correlated) with Allegheny Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegheny Technologies has no effect on the direction of ICC Holdings i.e., ICC Holdings and Allegheny Technologies go up and down completely randomly.
Pair Corralation between ICC Holdings and Allegheny Technologies
Given the investment horizon of 90 days ICC Holdings is expected to generate 0.2 times more return on investment than Allegheny Technologies. However, ICC Holdings is 5.02 times less risky than Allegheny Technologies. It trades about 0.03 of its potential returns per unit of risk. Allegheny Technologies Incorporated is currently generating about -0.04 per unit of risk. If you would invest 2,292 in ICC Holdings on August 28, 2024 and sell it today you would earn a total of 18.00 from holding ICC Holdings or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.3% |
| Values | Daily Returns |
ICC Holdings vs. Allegheny Technologies Incorpo
Performance |
| Timeline |
| ICC Holdings |
| Allegheny Technologies |
ICC Holdings and Allegheny Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and Allegheny Technologies
The main advantage of trading using opposite ICC Holdings and Allegheny Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, Allegheny Technologies 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 Allegheny Technologies will offset losses from the drop in Allegheny Technologies' long position.| ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title |
| Allegheny Technologies vs. Worthington Industries | Allegheny Technologies vs. Haynes International | Allegheny Technologies vs. ESAB Corp | Allegheny Technologies vs. Insteel Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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