Correlation Between ICC Holdings and Everspin Technologies

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

By analyzing existing cross correlation between ICC Holdings and Everspin Technologies, you can compare the effects of market volatilities on ICC Holdings and Everspin Technologies 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 Everspin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Everspin Technologies.

Diversification Opportunities for ICC Holdings and Everspin Technologies

0.48

Correlation Coefficient

ICC Holdings  Everspin Technologies

Very weak diversification

The 3 months correlation between ICC and Everspin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies 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 Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of ICC Holdings i.e., ICC Holdings and Everspin Technologies go up and down completely randomly.

Pair Corralation between ICC Holdings and Everspin Technologies

Given the investment horizon of 90 days ICC Holdings is expected to generate 0.46 times more return on investment than Everspin Technologies. However, ICC Holdings is 2.19 times less risky than Everspin Technologies. It trades about 0.07 of its potential returns per unit of risk. Everspin Technologies is currently generating about -0.16 per unit of risk. If you would invest  2,320  in ICC Holdings on December 10, 2024 and sell it today you would earn a total of  29.00  from holding ICC Holdings or generate 1.25% return on investment over 90 days.

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

ICC Holdings  vs.  Everspin Technologies

ICC Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 2 (%) 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.

Everspin Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everspin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ICC Holdings and Everspin Technologies

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

The idea behind ICC Holdings and Everspin Technologies 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.