Correlation Between NAPCO Security and ICF International
Can any of the company-specific risk be diversified away by investing in both NAPCO Security 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 NAPCO Security and ICF International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAPCO Security Technologies and ICF International, you can compare the effects of market volatilities on NAPCO Security 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 NAPCO Security with a short position of ICF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAPCO Security and ICF International.
Diversification Opportunities for NAPCO Security and ICF International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAPCO and ICF is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NAPCO Security Technologies and ICF International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICF International and NAPCO Security 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 NAPCO Security Technologies 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 NAPCO Security i.e., NAPCO Security and ICF International go up and down completely randomly.
Pair Corralation between NAPCO Security and ICF International
Given the investment horizon of 90 days NAPCO Security Technologies is expected to generate 1.39 times more return on investment than ICF International. However, NAPCO Security is 1.39 times more volatile than ICF International. It trades about 0.18 of its potential returns per unit of risk. ICF International is currently generating about -0.19 per unit of risk. If you would invest 3,070 in NAPCO Security Technologies on August 19, 2025 and sell it today you would earn a total of 965.00 from holding NAPCO Security Technologies or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAPCO Security Technologies vs. ICF International
Performance |
| Timeline |
| NAPCO Security Techn |
| ICF International |
NAPCO Security and ICF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAPCO Security and ICF International
The main advantage of trading using opposite NAPCO Security and ICF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAPCO Security 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.| NAPCO Security vs. Ducommun Incorporated | NAPCO Security vs. ICF International | NAPCO Security vs. Willdan Group | NAPCO Security vs. Tennant Company |
| ICF International vs. ArcBest Corp | ICF International vs. CRA International | ICF International vs. Kennametal | ICF International vs. Energizer Holdings |
Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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