Correlation Between Ryan Specialty and ICC Holdings

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

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

Diversification Opportunities for Ryan Specialty and ICC Holdings

0.5

Correlation Coefficient

Ryan Specialty  ICC Holdings

Very weak diversification

The 3 months correlation between Ryan and ICC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ryan Specialty Group and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings and Ryan Specialty 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 Ryan Specialty Group 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 Ryan Specialty i.e., Ryan Specialty and ICC Holdings go up and down completely randomly.

Pair Corralation between Ryan Specialty and ICC Holdings

Given the investment horizon of 90 days Ryan Specialty Group is expected to generate 3.29 times more return on investment than ICC Holdings. However, Ryan Specialty is 3.29 times more volatile than ICC Holdings. It trades about 0.06 of its potential returns per unit of risk. ICC Holdings is currently generating about 0.05 per unit of risk. If you would invest  6,398  in Ryan Specialty Group on September 13, 2024 and sell it today you would earn a total of  356.00  from holding Ryan Specialty Group or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	87.5%
Values	Daily Returns

Ryan Specialty Group  vs.  ICC Holdings

Ryan Specialty Group

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ryan Specialty Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Ryan Specialty is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ICC Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 3 (%) 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 Ryan Specialty and ICC Holdings

The main advantage of trading using opposite Ryan Specialty and ICC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryan Specialty 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 Ryan Specialty Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.