Correlation Between MDxHealth and ICON PLC
Can any of the company-specific risk be diversified away by investing in both MDxHealth and ICON PLC 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 MDxHealth and ICON PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDxHealth SA ADR and ICON PLC, you can compare the effects of market volatilities on MDxHealth and ICON PLC 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 MDxHealth with a short position of ICON PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDxHealth and ICON PLC.
Diversification Opportunities for MDxHealth and ICON PLC
Poor diversification
The 3 months correlation between MDxHealth and ICON is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MDxHealth SA ADR and ICON PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICON PLC and MDxHealth 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 MDxHealth SA ADR are associated (or correlated) with ICON PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICON PLC has no effect on the direction of MDxHealth i.e., MDxHealth and ICON PLC go up and down completely randomly.
Pair Corralation between MDxHealth and ICON PLC
Given the investment horizon of 90 days MDxHealth SA ADR is expected to generate 1.47 times more return on investment than ICON PLC. However, MDxHealth is 1.47 times more volatile than ICON PLC. It trades about -0.01 of its potential returns per unit of risk. ICON PLC is currently generating about -0.06 per unit of risk. If you would invest 204.00 in MDxHealth SA ADR on September 3, 2024 and sell it today you would lose (4.00) from holding MDxHealth SA ADR or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MDxHealth SA ADR vs. ICON PLC
Performance |
| Timeline |
| MDxHealth SA ADR |
| ICON PLC |
MDxHealth and ICON PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDxHealth and ICON PLC
The main advantage of trading using opposite MDxHealth and ICON PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDxHealth position performs unexpectedly, ICON PLC 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 ICON PLC will offset losses from the drop in ICON PLC's long position.| MDxHealth vs. Inozyme Pharma | MDxHealth vs. Day One Biopharmaceuticals | MDxHealth vs. Acumen Pharmaceuticals | MDxHealth vs. Eledon Pharmaceuticals |
| ICON PLC vs. Mettler Toledo International | ICON PLC vs. Charles River Laboratories | ICON PLC vs. Laboratory of | ICON PLC vs. IQVIA Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |