Correlation Between Tropical Canning and ICC International

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

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

Diversification Opportunities for Tropical Canning and ICC International

0.54

Correlation Coefficient

Tropical Canning  ICC International

Very weak diversification

The 3 months correlation between Tropical and ICC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tropical Canning Public 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 Tropical Canning 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 Tropical Canning Public 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 Tropical Canning i.e., Tropical Canning and ICC International go up and down completely randomly.

Pair Corralation between Tropical Canning and ICC International

Assuming the 90 days horizon Tropical Canning is expected to generate 1.16 times less return on investment than ICC International. But when comparing it to its historical volatility, Tropical Canning Public is 1.01 times less risky than ICC International. It trades about 0.04 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  2,463  in ICC International Public on October 21, 2024 and sell it today you would earn a total of  887.00  from holding ICC International Public or generate 36.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Tropical Canning Public  vs.  ICC International Public

Tropical Canning Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tropical Canning Public 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 fundamental drivers 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

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICC International Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Tropical Canning and ICC International

The main advantage of trading using opposite Tropical Canning and ICC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tropical Canning 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 Tropical Canning Public 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.