Correlation Between ICTS International and MSA Safety
Can any of the company-specific risk be diversified away by investing in both ICTS International and MSA Safety 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 ICTS International and MSA Safety into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICTS International NV and MSA Safety, you can compare the effects of market volatilities on ICTS International and MSA Safety 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 ICTS International with a short position of MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICTS International and MSA Safety.
Diversification Opportunities for ICTS International and MSA Safety
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ICTS and MSA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ICTS International NV and MSA Safety in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety and ICTS 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 ICTS International NV are associated (or correlated) with MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of ICTS International i.e., ICTS International and MSA Safety go up and down completely randomly.
Pair Corralation between ICTS International and MSA Safety
Assuming the 90 days horizon ICTS International NV is expected to under-perform the MSA Safety. In addition to that, ICTS International is 3.82 times more volatile than MSA Safety. It trades about -0.05 of its total potential returns per unit of risk. MSA Safety is currently generating about 0.15 per unit of volatility. If you would invest 16,680 in MSA Safety on August 31, 2024 and sell it today you would earn a total of 752.00 from holding MSA Safety or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICTS International NV vs. MSA Safety
Performance |
| Timeline |
| ICTS International |
| MSA Safety |
ICTS International and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICTS International and MSA Safety
The main advantage of trading using opposite ICTS International and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICTS International position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| ICTS International vs. Seychelle Environmtl | ICTS International vs. Energy and Water | ICTS International vs. One World Universe | ICTS International vs. Vow ASA |
| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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