Correlation Between BrainsWay and Icecure Medical

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

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

Diversification Opportunities for BrainsWay and Icecure Medical

-0.51

Correlation Coefficient

BrainsWay  Icecure Medical

Excellent diversification

The 3 months correlation between BrainsWay and Icecure is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BrainsWay and Icecure Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icecure Medical and BrainsWay 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 BrainsWay are associated (or correlated) with Icecure Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icecure Medical has no effect on the direction of BrainsWay i.e., BrainsWay and Icecure Medical go up and down completely randomly.

Pair Corralation between BrainsWay and Icecure Medical

Assuming the 90 days horizon BrainsWay is expected to under-perform the Icecure Medical. But the pink sheet apears to be less risky and, when comparing its historical volatility, BrainsWay is 1.06 times less risky than Icecure Medical. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Icecure Medical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  110.00  in Icecure Medical on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Icecure Medical or generate 0.91% return on investment over 90 days.

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

BrainsWay  vs.  Icecure Medical

BrainsWay

Risk-Adjusted Performance

Very Weak

Over the last 90 days BrainsWay has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Icecure Medical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icecure Medical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Icecure Medical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BrainsWay and Icecure Medical

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

The idea behind BrainsWay and Icecure Medical 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.