Correlation Between ICF International and CBIZ

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

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

Diversification Opportunities for ICF International and CBIZ

0.75

Correlation Coefficient

ICF International  CBIZ

Poor diversification

The 3 months correlation between ICF and CBIZ is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ICF International and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc and ICF 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 ICF International are associated (or correlated) with CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of ICF International i.e., ICF International and CBIZ go up and down completely randomly.

Pair Corralation between ICF International and CBIZ

Given the investment horizon of 90 days ICF International is expected to under-perform the CBIZ. In addition to that, ICF International is 2.2 times more volatile than CBIZ Inc. It trades about -0.15 of its total potential returns per unit of risk. CBIZ Inc is currently generating about -0.11 per unit of volatility. If you would invest  8,272  in CBIZ Inc on December 26, 2024 and sell it today you would lose (864.00) from holding CBIZ Inc or give up 10.44% of portfolio value over 90 days.

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

ICF International  vs.  CBIZ Inc

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.

CBIZ Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBIZ Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with ICF International and CBIZ

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

The idea behind ICF International and CBIZ Inc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.