Correlation Between Icad and AmerisourceBergen

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

Diversification Opportunities for Icad and AmerisourceBergen

  Correlation Coefficient

Very good diversification

The 3 months correlation between Icad and AmerisourceBergen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Icad Inc and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Icad i.e., Icad and AmerisourceBergen go up and down completely randomly.

Pair Corralation between Icad and AmerisourceBergen

Given the investment horizon of 90 days Icad Inc is expected to under-perform the AmerisourceBergen. In addition to that, Icad is 4.73 times more volatile than AmerisourceBergen. It trades about -0.02 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.01 per unit of volatility. If you would invest  17,027  in AmerisourceBergen on March 3, 2023 and sell it today you would earn a total of  185.00  from holding AmerisourceBergen or generate 1.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
ValuesDaily Returns

Icad Inc  vs.  AmerisourceBergen

 Performance (%) 
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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

AmerisourceBergen Performance

11 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in AmerisourceBergen are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, AmerisourceBergen may actually be approaching a critical reversion point that can send shares even higher in July 2023.

Icad and AmerisourceBergen Volatility Contrast

   Predicted Return Density   

Pair Trading with Icad and AmerisourceBergen

The main advantage of trading using opposite Icad and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icad position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.
The idea behind Icad Inc and AmerisourceBergen 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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