Correlation Between Cerner and Icad

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

Diversification Opportunities for Cerner and Icad

-0.88
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cerner and Icad is -0.88. 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 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 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 i.e., Cerner and Icad go up and down completely randomly.

Pair Corralation between Cerner and Icad

If you would invest  9,492  in Cerner on July 5, 2022 and sell it today you would earn a total of  0.00  from holding Cerner or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy2.38%
ValuesDaily Returns

Cerner Corp.  vs.  Icad Inc

 Performance (%) 
       Timeline  
Cerner 
Cerner Performance
0 of 100
Over the last 90 days Cerner has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Cerner is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
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 unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in November 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Icad Price Channel

Cerner and Icad Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cerner and Icad

The main advantage of trading using opposite Cerner and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cerner 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.
Cerner vs. Amazon Inc
The idea behind Cerner 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.
Icad vs. General Electric
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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