Correlation Between Sri Trang and ICC International

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

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

Diversification Opportunities for Sri Trang and ICC International

0.18

Correlation Coefficient

Sri Trang  ICC International

Average diversification

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

Pair Corralation between Sri Trang and ICC International

Assuming the 90 days trading horizon Sri Trang is expected to generate 59.57 times less return on investment than ICC International. But when comparing it to its historical volatility, Sri Trang Gloves is 16.2 times less risky than ICC International. It trades about 0.01 of its potential returns per unit of risk. ICC International Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,670  in ICC International Public on October 8, 2024 and sell it today you would earn a total of  505.00  from holding ICC International Public or generate 18.91% return on investment over 90 days.

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

Sri Trang Gloves  vs.  ICC International Public

Sri Trang Gloves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sri Trang Gloves has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ICC International Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICC International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, ICC International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sri Trang and ICC International

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

The idea behind Sri Trang Gloves and ICC International Public 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.