Correlation Between ICF International and Mistras
Can any of the company-specific risk be diversified away by investing in both ICF International and Mistras 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 ICF International and Mistras into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICF International and Mistras Group, you can compare the effects of market volatilities on ICF International and Mistras 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 ICF International with a short position of Mistras. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICF International and Mistras.
Diversification Opportunities for ICF International and Mistras
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICF and Mistras is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ICF International and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and ICF International 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 ICF International are associated (or correlated) with Mistras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mistras Group has no effect on the direction of ICF International i.e., ICF International and Mistras go up and down completely randomly.
Pair Corralation between ICF International and Mistras
Given the investment horizon of 90 days ICF International is expected to under-perform the Mistras. But the stock apears to be less risky and, when comparing its historical volatility, ICF International is 1.76 times less risky than Mistras. The stock trades about -0.12 of its potential returns per unit of risk. The Mistras Group is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,123 in Mistras Group on August 31, 2024 and sell it today you would lose (195.00) from holding Mistras Group or give up 17.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICF International vs. Mistras Group
Performance |
| Timeline |
| ICF International |
| Mistras Group |
ICF International and Mistras Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICF International and Mistras
The main advantage of trading using opposite ICF International and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICF International position performs unexpectedly, Mistras 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 Mistras will offset losses from the drop in Mistras' long position.| ICF International vs. Forrester Research | ICF International vs. Huron Consulting Group | ICF International vs. Franklin Covey | ICF International vs. FTI Consulting |
| Mistras vs. Team Inc | Mistras vs. Thermon Group Holdings | Mistras vs. MRC Global | Mistras vs. Vishay Precision Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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