Correlation Between Accolade and Icad

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Can any of the company-specific risk be diversified away by investing in both Accolade and Icad 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 Accolade and Icad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accolade and Icad Inc, you can compare the effects of market volatilities on Accolade and Icad 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 Accolade with a short position of Icad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accolade and Icad.

Diversification Opportunities for Accolade and Icad

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Accolade and Icad is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Accolade and Icad Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icad Inc and Accolade 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 Accolade are associated (or correlated) with Icad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icad Inc has no effect on the direction of Accolade i.e., Accolade and Icad go up and down completely randomly.

Pair Corralation between Accolade and Icad

Given the investment horizon of 90 days Accolade is expected to generate 1.56 times more return on investment than Icad. However, Accolade is 1.56 times more volatile than Icad Inc. It trades about -0.04 of its potential returns per unit of risk. Icad Inc is currently generating about -0.09 per unit of risk. If you would invest  4,415  in Accolade on May 18, 2022 and sell it today you would lose (3,161)  from holding Accolade or give up 71.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Accolade  vs.  Icad Inc

 Performance (%) 
       Timeline  
Accolade 
Accolade Performance
16 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Accolade are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Accolade exhibited solid returns over the last few months and may actually be approaching a breakup point.

Accolade Price Channel

Icad Inc 
Icad Performance
0 of 100
Over the last 90 days Icad Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Icad is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Icad Price Channel

Accolade and Icad Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Accolade and Icad

The main advantage of trading using opposite Accolade and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accolade position performs unexpectedly, Icad 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 Icad will offset losses from the drop in Icad's long position.
The idea behind Accolade and Icad Inc 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.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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