Correlation Between Icad and DriveItAway

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

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

Diversification Opportunities for Icad and DriveItAway

0.53

Correlation Coefficient

Icad  DriveItAway

Very weak diversification

The 3 months correlation between Icad and DriveItAway is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding icad inc and DriveItAway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DriveItAway and Icad 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 icad inc are associated (or correlated) with DriveItAway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DriveItAway has no effect on the direction of Icad i.e., Icad and DriveItAway go up and down completely randomly.

Pair Corralation between Icad and DriveItAway

Given the investment horizon of 90 days Icad is expected to generate 1.82 times less return on investment than DriveItAway. In addition to that, Icad is 1.53 times more volatile than DriveItAway. It trades about 0.06 of its total potential returns per unit of risk. DriveItAway is currently generating about 0.16 per unit of volatility. If you would invest  2.00  in DriveItAway on December 28, 2024 and sell it today you would earn a total of  1.00  from holding DriveItAway or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

icad inc  vs.  DriveItAway

icad inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in icad inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Icad exhibited solid returns over the last few months and may actually be approaching a breakup point.

DriveItAway

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DriveItAway are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, DriveItAway showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icad and DriveItAway

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

The idea behind icad inc and DriveItAway 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.