Correlation Between Allscripts Hlthcare and Icad

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

Diversification Opportunities for Allscripts Hlthcare and Icad

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Allscripts and Icad is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Allscripts Hlthcare and Icad Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icad Inc and Allscripts Hlthcare 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 Allscripts Hlthcare 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 Allscripts Hlthcare i.e., Allscripts Hlthcare and Icad go up and down completely randomly.

Pair Corralation between Allscripts Hlthcare and Icad

Given the investment horizon of 90 days Allscripts Hlthcare is expected to under-perform the Icad. But the stock apears to be less risky and, when comparing its historical volatility, Allscripts Hlthcare is 2.16 times less risky than Icad. The stock trades about -0.2 of its potential returns per unit of risk. The Icad Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  382.00  in Icad Inc on April 1, 2022 and sell it today you would earn a total of  29.00  from holding Icad Inc or generate 7.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Allscripts Hlthcare  vs.  Icad Inc

 Performance (%) 
      Timeline 
Allscripts Hlthcare 
Allscripts Performance
0 of 100
Over the last 90 days Allscripts Hlthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Allscripts 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Icad Price Channel

Allscripts Hlthcare and Icad Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Allscripts Hlthcare and Icad

The main advantage of trading using opposite Allscripts Hlthcare and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allscripts Hlthcare 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 Allscripts Hlthcare 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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