Correlation Between Verisk Analytics and ICF International
Can any of the company-specific risk be diversified away by investing in both Verisk Analytics 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 Verisk Analytics and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verisk Analytics and ICF International, you can compare the effects of market volatilities on Verisk Analytics 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 Verisk Analytics with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verisk Analytics and ICF International.
Diversification Opportunities for Verisk Analytics and ICF International
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Verisk and ICF is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and Verisk Analytics 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 Verisk Analytics 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 Verisk Analytics i.e., Verisk Analytics and ICF International go up and down completely randomly.
Pair Corralation between Verisk Analytics and ICF International
Given the investment horizon of 90 days Verisk Analytics is expected to generate 0.66 times more return on investment than ICF International. However, Verisk Analytics is 1.51 times less risky than ICF International. It trades about 0.18 of its potential returns per unit of risk. ICF International is currently generating about -0.06 per unit of risk. If you would invest 28,042 in Verisk Analytics on November 9, 2024 and sell it today you would earn a total of 1,453 from holding Verisk Analytics or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verisk Analytics vs. ICF International
Performance |
| Timeline |
| Verisk Analytics |
| ICF International |
Verisk Analytics and ICF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verisk Analytics and ICF International
The main advantage of trading using opposite Verisk Analytics and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verisk Analytics 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.| Verisk Analytics vs. Equifax | Verisk Analytics vs. Exponent | Verisk Analytics vs. FTI Consulting | Verisk Analytics vs. Franklin Covey |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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