Correlation Between Black Diamond and Icosavax

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

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

Diversification Opportunities for Black Diamond and Icosavax

0.0

Correlation Coefficient

Black Diamond  Icosavax

Pay attention - limited upside

The 3 months correlation between Black and Icosavax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Black Diamond Therapeutics and Icosavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icosavax and Black Diamond 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 Black Diamond Therapeutics are associated (or correlated) with Icosavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icosavax has no effect on the direction of Black Diamond i.e., Black Diamond and Icosavax go up and down completely randomly.

Pair Corralation between Black Diamond and Icosavax

If you would invest (100.00) in Icosavax on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Icosavax or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Black Diamond Therapeutics  vs.  Icosavax

Black Diamond Therap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Black Diamond Therapeutics 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 fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Icosavax

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Black Diamond and Icosavax

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

The idea behind Black Diamond Therapeutics and Icosavax 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.