Correlation Between DLH Holdings and ICF International

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

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

Diversification Opportunities for DLH Holdings and ICF International

-0.54

Correlation Coefficient

DLH Holdings  ICF International

Excellent diversification

The 3 months correlation between DLH and ICF is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and DLH 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 DLH Holdings Corp are associated (or correlated) with ICF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICF International has no effect on the direction of DLH Holdings i.e., DLH Holdings and ICF International go up and down completely randomly.

Pair Corralation between DLH Holdings and ICF International

Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the ICF International. In addition to that, DLH Holdings is 1.28 times more volatile than ICF International. It trades about -0.43 of its total potential returns per unit of risk. ICF International is currently generating about 0.13 per unit of volatility. If you would invest  16,229  in ICF International on June 25, 2024 and sell it today you would earn a total of  522.00  from holding ICF International or generate 3.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DLH Holdings Corp  vs.  ICF International

DLH Holdings Corp

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DLH Holdings Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, DLH Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ICF International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ICF International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, ICF International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DLH Holdings and ICF International

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

The idea behind DLH Holdings Corp and ICF International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.