Correlation Between NYSE Composite and ICF International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and ICF International 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 NYSE Composite and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ICF International, you can compare the effects of market volatilities on NYSE Composite and ICF International 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 NYSE Composite with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ICF International.
Diversification Opportunities for NYSE Composite and ICF International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and ICF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and NYSE Composite 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 NYSE Composite are associated (or correlated) with ICF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICF International has no effect on the direction of NYSE Composite i.e., NYSE Composite and ICF International go up and down completely randomly.
Pair Corralation between NYSE Composite and ICF International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.39 times more return on investment than ICF International. However, NYSE Composite is 2.53 times less risky than ICF International. It trades about 0.11 of its potential returns per unit of risk. ICF International is currently generating about 0.02 per unit of risk. If you would invest 1,583,553 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 438,483 from holding NYSE Composite or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. ICF International
Performance |
| Timeline |
NYSE Composite and ICF International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ICF International
Pair trading matchups for ICF International
Pair Trading with NYSE Composite and ICF International
The main advantage of trading using opposite NYSE Composite and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, ICF International 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 ICF International will offset losses from the drop in ICF International's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| ICF International vs. Forrester Research | ICF International vs. Huron Consulting Group | ICF International vs. Franklin Covey | ICF International vs. FTI Consulting |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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