Correlation Between CochLear and Icad
Can any of the company-specific risk be diversified away by investing in both CochLear 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 CochLear and Icad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CochLear Ltd ADR and icad inc, you can compare the effects of market volatilities on CochLear 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 CochLear with a short position of Icad. Check out your portfolio center. Please also check ongoing floating volatility patterns of CochLear and Icad.
Diversification Opportunities for CochLear and Icad
Very good diversification
The 3 months correlation between CochLear and Icad is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CochLear Ltd ADR and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc and CochLear 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 CochLear Ltd ADR 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 CochLear i.e., CochLear and Icad go up and down completely randomly.
Pair Corralation between CochLear and Icad
Assuming the 90 days horizon CochLear Ltd ADR is expected to generate 0.17 times more return on investment than Icad. However, CochLear Ltd ADR is 5.82 times less risky than Icad. It trades about 0.24 of its potential returns per unit of risk. icad inc is currently generating about 0.0 per unit of risk. If you would invest 9,333 in CochLear Ltd ADR on August 30, 2024 and sell it today you would earn a total of 656.00 from holding CochLear Ltd ADR or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CochLear Ltd ADR vs. icad inc
Performance |
| Timeline |
| CochLear ADR |
| icad inc |
CochLear and Icad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CochLear and Icad
The main advantage of trading using opposite CochLear and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CochLear 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.| CochLear vs. Smith Nephew SNATS | CochLear vs. Integer Holdings Corp | CochLear vs. Demant AS ADR | CochLear vs. GN Store Nord |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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