Correlation Between ICON PLC and Todos Medical Ltd

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

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

Diversification Opportunities for ICON PLC and Todos Medical Ltd

0.0

Correlation Coefficient

ICON PLC  Todos Medical Ltd

Pay attention - limited upside

The 3 months correlation between ICON and Todos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ICON PLC and Todos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Todos Medical Ltd and ICON PLC 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 ICON PLC are associated (or correlated) with Todos Medical Ltd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Todos Medical Ltd has no effect on the direction of ICON PLC i.e., ICON PLC and Todos Medical Ltd go up and down completely randomly.

Pair Corralation between ICON PLC and Todos Medical Ltd

Given the investment horizon of 90 days ICON PLC is expected to generate 662.34 times less return on investment than Todos Medical Ltd. But when comparing it to its historical volatility, ICON PLC is 23.36 times less risky than Todos Medical Ltd. It trades about 0.0 of its potential returns per unit of risk. Todos Medical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.50  in Todos Medical on October 6, 2024 and sell it today you would lose (0.50) from holding Todos Medical or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ICON PLC  vs.  Todos Medical

ICON PLC

Risk-Adjusted Performance

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Very Weak

Over the last 90 days ICON PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Todos Medical Ltd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Todos Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Todos Medical Ltd is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ICON PLC and Todos Medical Ltd

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

The idea behind ICON PLC and Todos 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.