Correlation Between Icad and Recursion Pharmaceuticals

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

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

Diversification Opportunities for Icad and Recursion Pharmaceuticals

0.56

Correlation Coefficient

Icad  Recursion Pharmaceuticals

Very weak diversification

The 3 months correlation between Icad and Recursion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding icad inc and Recursion Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recursion Pharmaceuticals 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 Recursion Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recursion Pharmaceuticals has no effect on the direction of Icad i.e., Icad and Recursion Pharmaceuticals go up and down completely randomly.

Pair Corralation between Icad and Recursion Pharmaceuticals

Given the investment horizon of 90 days icad inc is expected to generate 1.11 times more return on investment than Recursion Pharmaceuticals. However, Icad is 1.11 times more volatile than Recursion Pharmaceuticals. It trades about 0.07 of its potential returns per unit of risk. Recursion Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest  165.00  in icad inc on September 17, 2024 and sell it today you would earn a total of  30.00  from holding icad inc or generate 18.18% return on investment over 90 days.

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

icad inc  vs.  Recursion Pharmaceuticals

icad inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in icad inc are ranked lower than 5 (%) 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.

Recursion Pharmaceuticals

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Recursion Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Recursion Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Icad and Recursion Pharmaceuticals

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

The idea behind icad inc and Recursion Pharmaceuticals 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.