Correlation Between ICC Holdings and Trupanion
Can any of the company-specific risk be diversified away by investing in both ICC Holdings and Trupanion 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 Trupanion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and Trupanion, you can compare the effects of market volatilities on ICC Holdings and Trupanion 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 Trupanion. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Trupanion.
Diversification Opportunities for ICC Holdings and Trupanion
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICC and Trupanion is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and Trupanion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trupanion 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 Trupanion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trupanion has no effect on the direction of ICC Holdings i.e., ICC Holdings and Trupanion go up and down completely randomly.
Pair Corralation between ICC Holdings and Trupanion
Given the investment horizon of 90 days ICC Holdings is expected to generate 0.13 times more return on investment than Trupanion. However, ICC Holdings is 7.84 times less risky than Trupanion. It trades about 0.08 of its potential returns per unit of risk. Trupanion is currently generating about -0.01 per unit of risk. If you would invest 2,299 in ICC Holdings on August 28, 2024 and sell it today you would earn a total of 11.00 from holding ICC Holdings or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
ICC Holdings vs. Trupanion
Performance |
| Timeline |
| ICC Holdings |
| Trupanion |
ICC Holdings and Trupanion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and Trupanion
The main advantage of trading using opposite ICC Holdings and Trupanion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, Trupanion 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 Trupanion will offset losses from the drop in Trupanion's long position.| ICC Holdings vs. Investors Title | ICC Holdings vs. AMERISAFE | ICC Holdings vs. Essent Group | ICC Holdings vs. MGIC Investment Corp |
| Trupanion vs. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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