Correlation Between ICC International and Sri Trang

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

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

Diversification Opportunities for ICC International and Sri Trang

0.39

Correlation Coefficient

ICC International  Sri Trang

Weak diversification

The 3 months correlation between ICC and Sri is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ICC International Public and Sri Trang Gloves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Gloves and ICC International 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 ICC International Public are associated (or correlated) with Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Gloves has no effect on the direction of ICC International i.e., ICC International and Sri Trang go up and down completely randomly.

Pair Corralation between ICC International and Sri Trang

Assuming the 90 days trading horizon ICC International Public is expected to generate 0.99 times more return on investment than Sri Trang. However, ICC International Public is 1.01 times less risky than Sri Trang. It trades about 0.0 of its potential returns per unit of risk. Sri Trang Gloves is currently generating about -0.16 per unit of risk. If you would invest  3,325  in ICC International Public on December 20, 2024 and sell it today you would lose (50.00) from holding ICC International Public or give up 1.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

ICC International Public  vs.  Sri Trang Gloves

ICC International Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days ICC International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, ICC International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sri Trang Gloves

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sri Trang Gloves has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ICC International and Sri Trang

The main advantage of trading using opposite ICC International and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC International position performs unexpectedly, Sri Trang 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 Sri Trang will offset losses from the drop in Sri Trang's long position.

The idea behind ICC International Public and Sri Trang Gloves 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.