Correlation Between ICF International and Waste Management
Can any of the company-specific risk be diversified away by investing in both ICF International and Waste Management 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 Waste Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICF International and Waste Management, you can compare the effects of market volatilities on ICF International and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICF International and Waste Management.
Diversification Opportunities for ICF International and Waste Management
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICF and Waste is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ICF International and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of ICF International i.e., ICF International and Waste Management go up and down completely randomly.
Pair Corralation between ICF International and Waste Management
Given the investment horizon of 90 days ICF International is expected to under-perform the Waste Management. In addition to that, ICF International is 3.11 times more volatile than Waste Management. It trades about -0.29 of its total potential returns per unit of risk. Waste Management is currently generating about 0.19 per unit of volatility. If you would invest 21,911 in Waste Management on August 30, 2024 and sell it today you would earn a total of 935.00 from holding Waste Management or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICF International vs. Waste Management
Performance |
| Timeline |
| ICF International |
| Waste Management |
ICF International and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICF International and Waste Management
The main advantage of trading using opposite ICF International and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICF International position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| ICF International vs. Forrester Research | ICF International vs. Huron Consulting Group | ICF International vs. Franklin Covey | ICF International vs. FTI Consulting |
| Waste Management vs. CRA International | Waste Management vs. ICF International | Waste Management vs. Forrester Research | Waste Management vs. Huron Consulting 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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