Correlation Between ICC Holdings and 191219BE3

Can any of the company-specific risk be diversified away by investing in both ICC Holdings and 191219BE3 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 191219BE3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ICC Holdings and COCA A ENTERPRISES, you can compare the effects of market volatilities on ICC Holdings and 191219BE3 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 191219BE3. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and 191219BE3.

Diversification Opportunities for ICC Holdings and 191219BE3

0.18

Correlation Coefficient

ICC Holdings  191219BE3

Average diversification

The 3 months correlation between ICC and 191219BE3 is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and COCA A ENTERPRISES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A ENTERPRISES 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 191219BE3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A ENTERPRISES has no effect on the direction of ICC Holdings i.e., ICC Holdings and 191219BE3 go up and down completely randomly.

Pair Corralation between ICC Holdings and 191219BE3

Given the investment horizon of 90 days ICC Holdings is expected to generate 2.58 times less return on investment than 191219BE3. But when comparing it to its historical volatility, ICC Holdings is 2.29 times less risky than 191219BE3. It trades about 0.24 of its potential returns per unit of risk. COCA A ENTERPRISES is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  10,604  in COCA A ENTERPRISES on September 24, 2024 and sell it today you would earn a total of  356.00  from holding COCA A ENTERPRISES or generate 3.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.0%
Values	Daily Returns

ICC Holdings  vs.  COCA A ENTERPRISES

ICC Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 9 (%) 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.

COCA A ENTERPRISES

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days COCA A ENTERPRISES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191219BE3 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ICC Holdings and 191219BE3

The main advantage of trading using opposite ICC Holdings and 191219BE3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, 191219BE3 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 191219BE3 will offset losses from the drop in 191219BE3's long position.

The idea behind ICC Holdings and COCA A ENTERPRISES 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.