Correlation Between Snap and ICF International
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and ICF International, you can compare the effects of market volatilities on Snap 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 Snap with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and ICF International.
Diversification Opportunities for Snap and ICF International
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Snap and ICF is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and Snap 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 Snap Inc 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 Snap i.e., Snap and ICF International go up and down completely randomly.
Pair Corralation between Snap and ICF International
Given the investment horizon of 90 days Snap Inc is expected to generate 2.32 times more return on investment than ICF International. However, Snap is 2.32 times more volatile than ICF International. It trades about 0.03 of its potential returns per unit of risk. ICF International is currently generating about 0.03 per unit of risk. If you would invest 1,010 in Snap Inc on August 24, 2024 and sell it today you would earn a total of 132.00 from holding Snap Inc or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. ICF International
Performance |
| Timeline |
| Snap Inc |
| ICF International |
Snap and ICF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and ICF International
The main advantage of trading using opposite Snap and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and ICF International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Stocks Directory module to find actively traded stocks across global markets.
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