Correlation Between ICF International and TransUnion

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

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

Diversification Opportunities for ICF International and TransUnion

0.69

Correlation Coefficient

ICF International  TransUnion

Poor diversification

The 3 months correlation between ICF and TransUnion is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ICF International and TransUnion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransUnion 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 TransUnion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransUnion has no effect on the direction of ICF International i.e., ICF International and TransUnion go up and down completely randomly.

Pair Corralation between ICF International and TransUnion

Given the investment horizon of 90 days ICF International is expected to under-perform the TransUnion. In addition to that, ICF International is 1.44 times more volatile than TransUnion. It trades about -0.13 of its total potential returns per unit of risk. TransUnion is currently generating about -0.07 per unit of volatility. If you would invest  9,264  in TransUnion on December 29, 2024 and sell it today you would lose (1,039) from holding TransUnion or give up 11.22% 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.  TransUnion

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.

TransUnion

Risk-Adjusted Performance

Very Weak

Over the last 90 days TransUnion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with ICF International and TransUnion

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

The idea behind ICF International and TransUnion 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.