Correlation Between Icares Medicus and Pegavision

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

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

Diversification Opportunities for Icares Medicus and Pegavision

0.83

Correlation Coefficient

Icares Medicus  Pegavision

Very poor diversification

The 3 months correlation between Icares and Pegavision is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Icares Medicus and Pegavision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegavision and Icares Medicus 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 Icares Medicus are associated (or correlated) with Pegavision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegavision has no effect on the direction of Icares Medicus i.e., Icares Medicus and Pegavision go up and down completely randomly.

Pair Corralation between Icares Medicus and Pegavision

Assuming the 90 days trading horizon Icares Medicus is expected to generate 1.1 times more return on investment than Pegavision. However, Icares Medicus is 1.1 times more volatile than Pegavision. It trades about -0.17 of its potential returns per unit of risk. Pegavision is currently generating about -0.18 per unit of risk. If you would invest  12,500  in Icares Medicus on September 24, 2024 and sell it today you would lose (850.00) from holding Icares Medicus or give up 6.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Icares Medicus  vs.  Pegavision

Icares Medicus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Icares Medicus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pegavision

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pegavision has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Icares Medicus and Pegavision

The main advantage of trading using opposite Icares Medicus and Pegavision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icares Medicus position performs unexpectedly, Pegavision 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 Pegavision will offset losses from the drop in Pegavision's long position.

The idea behind Icares Medicus and Pegavision 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.