Correlation Between Value Line and Intercontinental

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

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

Diversification Opportunities for Value Line and Intercontinental

0.49

Correlation Coefficient

Value Line  Intercontinental

Very weak diversification

The 3 months correlation between Value and Intercontinental is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Value Line and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange and Value Line 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 Value Line are associated (or correlated) with Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of Value Line i.e., Value Line and Intercontinental go up and down completely randomly.

Pair Corralation between Value Line and Intercontinental

Given the investment horizon of 90 days Value Line is expected to generate 1.85 times more return on investment than Intercontinental. However, Value Line is 1.85 times more volatile than Intercontinental Exchange. It trades about 0.02 of its potential returns per unit of risk. Intercontinental Exchange is currently generating about -0.07 per unit of risk. If you would invest  3,742  in Value Line on September 17, 2025 and sell it today you would earn a total of  72.00  from holding Value Line or generate 1.92% return on investment over 90 days.

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

Value Line  vs.  Intercontinental Exchange

Value Line

Risk-Adjusted Performance

Weakest

Over the last 90 days Value Line has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Value Line is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Intercontinental Exchange

Risk-Adjusted Performance

Weakest

Over the last 90 days Intercontinental Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Intercontinental is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Value Line and Intercontinental

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

The idea behind Value Line and Intercontinental Exchange 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.