Correlation Between Heidrick Struggles and ICF International

Can any of the company-specific risk be diversified away by investing in both Heidrick Struggles 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 Heidrick Struggles and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heidrick Struggles International and ICF International, you can compare the effects of market volatilities on Heidrick Struggles 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 Heidrick Struggles with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heidrick Struggles and ICF International.

Diversification Opportunities for Heidrick Struggles and ICF International

0.51

Correlation Coefficient

Heidrick Struggles  ICF International

Very weak diversification

The 3 months correlation between Heidrick and ICF is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Heidrick Struggles Internation and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and Heidrick Struggles 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 Heidrick Struggles International 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 Heidrick Struggles i.e., Heidrick Struggles and ICF International go up and down completely randomly.

Pair Corralation between Heidrick Struggles and ICF International

Given the investment horizon of 90 days Heidrick Struggles International is expected to generate 0.67 times more return on investment than ICF International. However, Heidrick Struggles International is 1.49 times less risky than ICF International. It trades about 0.01 of its potential returns per unit of risk. ICF International is currently generating about -0.14 per unit of risk. If you would invest  4,406  in Heidrick Struggles International on December 28, 2024 and sell it today you would earn a total of  3.00  from holding Heidrick Struggles International or generate 0.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Heidrick Struggles Internation  vs.  ICF International

Heidrick Struggles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heidrick Struggles International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Heidrick Struggles is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

ICF International

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICF International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Heidrick Struggles and ICF International

The main advantage of trading using opposite Heidrick Struggles and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heidrick Struggles 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 Heidrick Struggles International 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.