Correlation Between One World and ICTS International
Can any of the company-specific risk be diversified away by investing in both One World and ICTS 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 One World and ICTS International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One World Universe and ICTS International NV, you can compare the effects of market volatilities on One World and ICTS 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 One World with a short position of ICTS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of One World and ICTS International.
Diversification Opportunities for One World and ICTS International
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between One and ICTS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding One World Universe and ICTS International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICTS International and One World 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 One World Universe are associated (or correlated) with ICTS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICTS International has no effect on the direction of One World i.e., One World and ICTS International go up and down completely randomly.
Pair Corralation between One World and ICTS International
Given the investment horizon of 90 days One World Universe is expected to generate 2.74 times more return on investment than ICTS International. However, One World is 2.74 times more volatile than ICTS International NV. It trades about 0.04 of its potential returns per unit of risk. ICTS International NV is currently generating about 0.02 per unit of risk. If you would invest 1.07 in One World Universe on September 2, 2024 and sell it today you would lose (0.34) from holding One World Universe or give up 31.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
One World Universe vs. ICTS International NV
Performance |
| Timeline |
| One World Universe |
| ICTS International |
One World and ICTS International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One World and ICTS International
The main advantage of trading using opposite One World and ICTS International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One World position performs unexpectedly, ICTS 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 ICTS International will offset losses from the drop in ICTS International's long position.| One World vs. TonnerOne World Holdings | One World vs. JPX Global | One World vs. All American Pet | One World vs. RCABS Inc |
| ICTS International vs. Seychelle Environmtl | ICTS International vs. Energy and Water | ICTS International vs. One World Universe | ICTS International vs. Vow ASA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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