Correlation Between Icad and Healthequity

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

Diversification Opportunities for Icad and Healthequity

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Icad and Healthequity is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Icad Inc and Healthequity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthequity 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 Healthequity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthequity has no effect on the direction of Icad i.e., Icad and Healthequity go up and down completely randomly.

Pair Corralation between Icad and Healthequity

Given the investment horizon of 90 days Icad Inc is expected to under-perform the Healthequity. In addition to that, Icad is 1.94 times more volatile than Healthequity. It trades about -0.32 of its total potential returns per unit of risk. Healthequity is currently generating about 0.12 per unit of volatility. If you would invest  5,899  in Healthequity on May 16, 2022 and sell it today you would earn a total of  269.00  from holding Healthequity or generate 4.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Icad Inc  vs.  Healthequity

 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 rather sound basic indicators, Icad is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Icad Price Channel

Healthequity 
Healthequity Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish basic indicators, Healthequity may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Healthequity Price Channel

Icad and Healthequity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Icad and Healthequity

The main advantage of trading using opposite Icad and Healthequity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icad position performs unexpectedly, Healthequity 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 Healthequity will offset losses from the drop in Healthequity's long position.
The idea behind Icad Inc and Healthequity 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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