Correlation Between Tandem Diabetes and Icecure Medical

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

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

Diversification Opportunities for Tandem Diabetes and Icecure Medical

-0.28

Correlation Coefficient

Tandem Diabetes  Icecure Medical

Very good diversification

The 3 months correlation between Tandem and Icecure is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care and Icecure Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icecure Medical and Tandem Diabetes 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 Tandem Diabetes Care are associated (or correlated) with Icecure Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icecure Medical has no effect on the direction of Tandem Diabetes i.e., Tandem Diabetes and Icecure Medical go up and down completely randomly.

Pair Corralation between Tandem Diabetes and Icecure Medical

Given the investment horizon of 90 days Tandem Diabetes Care is expected to generate 0.58 times more return on investment than Icecure Medical. However, Tandem Diabetes Care is 1.73 times less risky than Icecure Medical. It trades about 0.01 of its potential returns per unit of risk. Icecure Medical is currently generating about 0.0 per unit of risk. If you would invest  3,285  in Tandem Diabetes Care on September 4, 2024 and sell it today you would lose (34.00) from holding Tandem Diabetes Care or give up 1.04% of portfolio value over 90 days.

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

Tandem Diabetes Care  vs.  Icecure Medical

Tandem Diabetes Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tandem Diabetes Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Icecure Medical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Icecure Medical are ranked lower than 7 (%) 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.

Pair Trading with Tandem Diabetes and Icecure Medical

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

The idea behind Tandem Diabetes Care and Icecure 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 Commodity Directory module to find actively traded commodities issued by global exchanges.