Correlation Between Icecure Medical and Heart Test

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

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

Diversification Opportunities for Icecure Medical and Heart Test

-0.15

Correlation Coefficient

Icecure Medical  Heart Test

Good diversification

The 3 months correlation between Icecure and Heart is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Icecure Medical and Heart Test Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heart Test Laboratories and Icecure Medical 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 Icecure Medical are associated (or correlated) with Heart Test. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heart Test Laboratories has no effect on the direction of Icecure Medical i.e., Icecure Medical and Heart Test go up and down completely randomly.

Pair Corralation between Icecure Medical and Heart Test

Given the investment horizon of 90 days Icecure Medical is expected to generate 1.01 times less return on investment than Heart Test. But when comparing it to its historical volatility, Icecure Medical is 1.41 times less risky than Heart Test. It trades about 0.35 of its potential returns per unit of risk. Heart Test Laboratories is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  282.00  in Heart Test Laboratories on September 13, 2024 and sell it today you would earn a total of  119.00  from holding Heart Test Laboratories or generate 42.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Icecure Medical  vs.  Heart Test Laboratories

Icecure Medical

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icecure Medical are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Icecure Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Heart Test Laboratories

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heart Test Laboratories are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Heart Test unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Icecure Medical and Heart Test

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

The idea behind Icecure Medical and Heart Test Laboratories 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 Transaction History module to view history of all your transactions and understand their impact on performance.