Correlation Between ICC Holdings and AW Revenue
Can any of the company-specific risk be diversified away by investing in both ICC Holdings and AW Revenue 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 AW Revenue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and AW Revenue Royalties, you can compare the effects of market volatilities on ICC Holdings and AW Revenue 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 AW Revenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and AW Revenue.
Diversification Opportunities for ICC Holdings and AW Revenue
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICC and AWRRF is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and AW Revenue Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AW Revenue Royalties 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 AW Revenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AW Revenue Royalties has no effect on the direction of ICC Holdings i.e., ICC Holdings and AW Revenue go up and down completely randomly.
Pair Corralation between ICC Holdings and AW Revenue
Given the investment horizon of 90 days ICC Holdings is expected to generate 12.0 times more return on investment than AW Revenue. However, ICC Holdings is 12.0 times more volatile than AW Revenue Royalties. It trades about 0.05 of its potential returns per unit of risk. AW Revenue Royalties is currently generating about 0.02 per unit of risk. If you would invest 1,526 in ICC Holdings on August 28, 2024 and sell it today you would earn a total of 784.00 from holding ICC Holdings or generate 51.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.75% |
| Values | Daily Returns |
ICC Holdings vs. AW Revenue Royalties
Performance |
| Timeline |
| ICC Holdings |
| AW Revenue Royalties |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
ICC Holdings and AW Revenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and AW Revenue
The main advantage of trading using opposite ICC Holdings and AW Revenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, AW Revenue 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 AW Revenue will offset losses from the drop in AW Revenue's long position.| ICC Holdings vs. Investors Title | ICC Holdings vs. AMERISAFE | ICC Holdings vs. Essent Group | ICC Holdings vs. MGIC Investment Corp |
| AW Revenue vs. NextNav Warrant | AW Revenue vs. Academy Sports Outdoors | AW Revenue vs. Sun Country Airlines | AW Revenue vs. Supercom |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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