Correlation Between Butterfly Network and Icad

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

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

Diversification Opportunities for Butterfly Network and Icad

0.25

Correlation Coefficient

Butterfly Network  Icad

Modest diversification

The 3 months correlation between Butterfly and Icad is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Butterfly Network and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc and Butterfly Network 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 Butterfly Network 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 Butterfly Network i.e., Butterfly Network and Icad go up and down completely randomly.

Pair Corralation between Butterfly Network and Icad

Given the investment horizon of 90 days Butterfly Network is expected to generate 1.24 times more return on investment than Icad. However, Butterfly Network is 1.24 times more volatile than icad inc. It trades about 0.2 of its potential returns per unit of risk. icad inc is currently generating about 0.07 per unit of risk. If you would invest  88.00  in Butterfly Network on September 16, 2024 and sell it today you would earn a total of  251.00  from holding Butterfly Network or generate 285.23% return on investment over 90 days.

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

Butterfly Network  vs.  icad inc

Butterfly Network

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Butterfly Network are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Butterfly Network showed 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 Butterfly Network and Icad

The main advantage of trading using opposite Butterfly Network and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Butterfly Network 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 Butterfly Network 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.