Correlation Between Icad and General Electric

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

Diversification Opportunities for Icad and General Electric

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Icad and General is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Icad Inc and General Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Electric and Icad 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 Icad Inc are associated (or correlated) with General Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Electric has no effect on the direction of Icad i.e., Icad and General Electric go up and down completely randomly.

Pair Corralation between Icad and General Electric

Given the investment horizon of 90 days Icad Inc is expected to under-perform the General Electric. In addition to that, Icad is 2.27 times more volatile than General Electric. It trades about -0.08 of its total potential returns per unit of risk. General Electric is currently generating about -0.01 per unit of volatility. If you would invest  9,561  in General Electric on August 31, 2022 and sell it today you would lose (1,006)  from holding General Electric or give up 10.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Icad Inc  vs.  General Electric

 Performance (%) 
       Timeline  
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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Icad Price Channel

General Electric 
General Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Electric are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish technical and fundamental indicators, General Electric exhibited solid returns over the last few months and may actually be approaching a breakup point.

General Price Channel

Icad and General Electric Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Icad and General Electric

The main advantage of trading using opposite Icad and General Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icad position performs unexpectedly, General Electric 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 General Electric will offset losses from the drop in General Electric's long position.
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The idea behind Icad Inc and General Electric 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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