Correlation Between ICC Holdings and NI Holdings

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

By analyzing existing cross correlation between ICC Holdings and NI Holdings, you can compare the effects of market volatilities on ICC Holdings and NI Holdings 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 NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and NI Holdings.

Diversification Opportunities for ICC Holdings and NI Holdings

0.1

Correlation Coefficient

ICC Holdings  NI Holdings

Average diversification

The 3 months correlation between ICC and NODK is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings 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 NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of ICC Holdings i.e., ICC Holdings and NI Holdings go up and down completely randomly.

Pair Corralation between ICC Holdings and NI Holdings

Given the investment horizon of 90 days ICC Holdings is expected to generate 2.01 times less return on investment than NI Holdings. In addition to that, ICC Holdings is 1.25 times more volatile than NI Holdings. It trades about 0.01 of its total potential returns per unit of risk. NI Holdings is currently generating about 0.03 per unit of volatility. If you would invest  1,321  in NI Holdings on January 20, 2024 and sell it today you would earn a total of  147.00  from holding NI Holdings or generate 11.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.57%
Values	Daily Returns

ICC Holdings  vs.  NI Holdings

ICC Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

NI Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NI Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, NI Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ICC Holdings and NI Holdings

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

The idea behind ICC Holdings and NI Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.