Correlation Between ICC Holdings and Inflection Point

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

By analyzing existing cross correlation between ICC Holdings and Inflection Point Acquisition, you can compare the effects of market volatilities on ICC Holdings and Inflection Point 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 Holdings with a short position of Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Inflection Point.

Diversification Opportunities for ICC Holdings and Inflection Point

0.63

Correlation Coefficient

ICC Holdings  Inflection Point

Poor diversification

The 3 months correlation between ICC and Inflection is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and ICC Holdings 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 Holdings are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of ICC Holdings i.e., ICC Holdings and Inflection Point go up and down completely randomly.

Pair Corralation between ICC Holdings and Inflection Point

Given the investment horizon of 90 days ICC Holdings is expected to generate 21.12 times less return on investment than Inflection Point. But when comparing it to its historical volatility, ICC Holdings is 7.02 times less risky than Inflection Point. It trades about 0.05 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,086  in Inflection Point Acquisition on September 27, 2024 and sell it today you would earn a total of  169.00  from holding Inflection Point Acquisition or generate 15.56% return on investment over 90 days.

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

ICC Holdings  vs.  Inflection Point Acquisition

ICC Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Inflection Point Acq

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICC Holdings and Inflection Point

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

The idea behind ICC Holdings and Inflection Point Acquisition 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.