Correlation Between ICF International and Intevac

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

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

Diversification Opportunities for ICF International and Intevac

0.79

Correlation Coefficient

ICF International  Intevac

Poor diversification

The 3 months correlation between ICF and Intevac is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ICF International and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac and ICF International 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 ICF International are associated (or correlated) with Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of ICF International i.e., ICF International and Intevac go up and down completely randomly.

Pair Corralation between ICF International and Intevac

Given the investment horizon of 90 days ICF International is expected to generate 0.62 times more return on investment than Intevac. However, ICF International is 1.62 times less risky than Intevac. It trades about -0.11 of its potential returns per unit of risk. Intevac is currently generating about -0.08 per unit of risk. If you would invest  16,332  in ICF International on September 2, 2024 and sell it today you would lose (2,475) from holding ICF International or give up 15.15% of portfolio value over 90 days.

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

ICF International  vs.  Intevac

ICF International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ICF International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Intevac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intevac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ICF International and Intevac

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

The idea behind ICF International and Intevac 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.