Correlation Between Icm Small and Global Strategist

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

By analyzing existing cross correlation between Icm Small Pany and Global Strategist Portfolio, you can compare the effects of market volatilities on Icm Small and Global Strategist 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 Icm Small with a short position of Global Strategist. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icm Small and Global Strategist.

Diversification Opportunities for Icm Small and Global Strategist

0.34

Correlation Coefficient

Icm Small  Global Strategist

Weak diversification

The 3 months correlation between Icm and Global is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Icm Small Pany and Global Strategist Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Strategist and Icm Small 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 Icm Small Pany are associated (or correlated) with Global Strategist. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Strategist has no effect on the direction of Icm Small i.e., Icm Small and Global Strategist go up and down completely randomly.

Pair Corralation between Icm Small and Global Strategist

Assuming the 90 days horizon Icm Small Pany is expected to generate 2.56 times more return on investment than Global Strategist. However, Icm Small is 2.56 times more volatile than Global Strategist Portfolio. It trades about 0.06 of its potential returns per unit of risk. Global Strategist Portfolio is currently generating about 0.12 per unit of risk. If you would invest  2,858  in Icm Small Pany on September 4, 2024 and sell it today you would earn a total of  481.00  from holding Icm Small Pany or generate 16.83% return on investment over 90 days.

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

Icm Small Pany  vs.  Global Strategist Portfolio

Icm Small Pany

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icm Small Pany are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Icm Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global Strategist

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Strategist Portfolio are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Global Strategist is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Icm Small and Global Strategist

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

The idea behind Icm Small Pany and Global Strategist Portfolio 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.