Correlation Between Cerner Corp and Icad

Can any of the company-specific risk be diversified away by investing in both Cerner Corp 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 Cerner Corp and Icad into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cerner Corp and icad inc, you can compare the effects of market volatilities on Cerner Corp 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 Cerner Corp with a short position of Icad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerner Corp and Icad.

Diversification Opportunities for Cerner Corp and Icad

-0.56

Correlation Coefficient

Cerner Corp  Icad

Excellent diversification

The 3 months correlation between Cerner and Icad is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cerner Corp and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc and Cerner Corp 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 Cerner Corp 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 Cerner Corp i.e., Cerner Corp and Icad go up and down completely randomly.

Pair Corralation between Cerner Corp and Icad

If you would invest  150.00  in icad inc on January 25, 2024 and sell it today you would earn a total of  6.00  from holding icad inc or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Cerner Corp  vs.  icad inc

Cerner Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cerner Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cerner Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

icad inc

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in icad inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Icad exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerner Corp and Icad

The main advantage of trading using opposite Cerner Corp and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerner Corp 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 Cerner Corp 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.