Correlation Between ICF International and VCI Global

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

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

Diversification Opportunities for ICF International and VCI Global

0.76

Correlation Coefficient

ICF International  VCI Global

Poor diversification

The 3 months correlation between ICF and VCI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ICF International and VCI Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCI Global Limited 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 VCI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCI Global Limited has no effect on the direction of ICF International i.e., ICF International and VCI Global go up and down completely randomly.

Pair Corralation between ICF International and VCI Global

Given the investment horizon of 90 days ICF International is expected to generate 0.39 times more return on investment than VCI Global. However, ICF International is 2.58 times less risky than VCI Global. It trades about -0.15 of its potential returns per unit of risk. VCI Global Limited is currently generating about -0.18 per unit of risk. If you would invest  11,915  in ICF International on December 26, 2024 and sell it today you would lose (3,504) from holding ICF International or give up 29.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

ICF International  vs.  VCI Global Limited

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.

VCI Global Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ICF International and VCI Global

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

The idea behind ICF International and VCI Global Limited 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.