Correlation Between ICC Holdings and Fair Isaac

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Can any of the company-specific risk be diversified away by investing in both ICC Holdings and Fair Isaac 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 ICC Holdings and Fair Isaac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and Fair Isaac, you can compare the effects of market volatilities on ICC Holdings and Fair Isaac 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 ICC Holdings with a short position of Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Fair Isaac.

Diversification Opportunities for ICC Holdings and Fair Isaac

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between ICC and Fair is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac and ICC Holdings 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 ICC Holdings are associated (or correlated) with Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of ICC Holdings i.e., ICC Holdings and Fair Isaac go up and down completely randomly.

Pair Corralation between ICC Holdings and Fair Isaac

Given the investment horizon of 90 days ICC Holdings is expected to under-perform the Fair Isaac. But the stock apears to be less risky and, when comparing its historical volatility, ICC Holdings is 3.61 times less risky than Fair Isaac. The stock trades about -0.53 of its potential returns per unit of risk. The Fair Isaac is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  128,151  in Fair Isaac on November 24, 2023 and sell it today you would lose (3,495) from holding Fair Isaac or give up 2.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy52.38%
ValuesDaily Returns

ICC Holdings  vs.  Fair Isaac

 Performance 
       Timeline  
ICC Holdings 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days ICC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.
Fair Isaac 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Fair Isaac displayed solid returns over the last few months and may actually be approaching a breakup point.

ICC Holdings and Fair Isaac Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ICC Holdings and Fair Isaac

The main advantage of trading using opposite ICC Holdings and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.
The idea behind ICC Holdings and Fair Isaac 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.
Check out your portfolio center.
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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