Correlation Between Sonova Holding and Icad

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

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

Diversification Opportunities for Sonova Holding and Icad

0.45

Correlation Coefficient

Sonova Holding  Icad

Very weak diversification

The 3 months correlation between Sonova and Icad is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sonova Holding AG and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc and Sonova Holding 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 Sonova Holding AG are associated (or correlated) with Icad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of icad inc has no effect on the direction of Sonova Holding i.e., Sonova Holding and Icad go up and down completely randomly.

Pair Corralation between Sonova Holding and Icad

Assuming the 90 days horizon Sonova Holding AG is expected to under-perform the Icad. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sonova Holding AG is 5.14 times less risky than Icad. The pink sheet trades about -0.12 of its potential returns per unit of risk. The icad inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  192.00  in icad inc on December 28, 2024 and sell it today you would earn a total of  22.00  from holding icad inc or generate 11.46% return on investment over 90 days.

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

Sonova Holding AG  vs.  icad inc

Sonova Holding AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sonova Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with Sonova Holding and Icad

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

The idea behind Sonova Holding AG and icad inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.