Correlation Between FitLife Brands, and ICC Holdings

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

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

Diversification Opportunities for FitLife Brands, and ICC Holdings

0.04

Correlation Coefficient

FitLife Brands,  ICC Holdings

Significant diversification

The 3 months correlation between FitLife and ICC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and ICC Holdings go up and down completely randomly.

Pair Corralation between FitLife Brands, and ICC Holdings

Given the investment horizon of 90 days FitLife Brands, Common is expected to under-perform the ICC Holdings. In addition to that, FitLife Brands, is 3.32 times more volatile than ICC Holdings. It trades about -0.01 of its total potential returns per unit of risk. ICC Holdings is currently generating about 0.05 per unit of volatility. If you would invest  2,298  in ICC Holdings on September 27, 2024 and sell it today you would earn a total of  45.00  from holding ICC Holdings or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

FitLife Brands, Common  vs.  ICC Holdings

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ICC Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 4 (%) 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 current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with FitLife Brands, and ICC Holdings

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

The idea behind FitLife Brands, Common and ICC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.