Correlation Between ICC Holdings and National Beverage
Can any of the company-specific risk be diversified away by investing in both ICC Holdings and National Beverage 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 National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and National Beverage Corp, you can compare the effects of market volatilities on ICC Holdings and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and National Beverage.
Diversification Opportunities for ICC Holdings and National Beverage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ICC and National is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of ICC Holdings i.e., ICC Holdings and National Beverage go up and down completely randomly.
Pair Corralation between ICC Holdings and National Beverage
Given the investment horizon of 90 days ICC Holdings is expected to generate 34.04 times more return on investment than National Beverage. However, ICC Holdings is 34.04 times more volatile than National Beverage Corp. It trades about 0.06 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.02 per unit of risk. If you would invest 1,585 in ICC Holdings on August 28, 2024 and sell it today you would earn a total of 725.00 from holding ICC Holdings or generate 45.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.53% |
| Values | Daily Returns |
ICC Holdings vs. National Beverage Corp
Performance |
| Timeline |
| ICC Holdings |
| National Beverage Corp |
ICC Holdings and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and National Beverage
The main advantage of trading using opposite ICC Holdings and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| ICC Holdings vs. Investors Title | ICC Holdings vs. AMERISAFE | ICC Holdings vs. Essent Group | ICC Holdings vs. MGIC Investment Corp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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