Correlation Between Applied Blockchain and Icad

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

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

Diversification Opportunities for Applied Blockchain and Icad

0.09

Correlation Coefficient

Applied Blockchain  Icad

Significant diversification

The 3 months correlation between Applied and Icad is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc and Applied Blockchain 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 Applied Blockchain 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 Applied Blockchain i.e., Applied Blockchain and Icad go up and down completely randomly.

Pair Corralation between Applied Blockchain and Icad

Given the investment horizon of 90 days Applied Blockchain is expected to generate 1.97 times more return on investment than Icad. However, Applied Blockchain is 1.97 times more volatile than icad inc. It trades about 0.09 of its potential returns per unit of risk. icad inc is currently generating about 0.07 per unit of risk. If you would invest  516.00  in Applied Blockchain on September 16, 2024 and sell it today you would earn a total of  374.00  from holding Applied Blockchain or generate 72.48% return on investment over 90 days.

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

Applied Blockchain  vs.  icad inc

Applied Blockchain

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

icad inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in icad inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Icad exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Blockchain and Icad

The main advantage of trading using opposite Applied Blockchain and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain 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 Applied Blockchain 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 the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.