Correlation Between Fulcrum Therapeutics and Icad

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

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

Diversification Opportunities for Fulcrum Therapeutics and Icad

-0.36

Correlation Coefficient

Fulcrum Therapeutics  Icad

Very good diversification

The 3 months correlation between Fulcrum and Icad is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Therapeutics and icad inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on icad inc and Fulcrum Therapeutics 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 Fulcrum Therapeutics 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 Fulcrum Therapeutics i.e., Fulcrum Therapeutics and Icad go up and down completely randomly.

Pair Corralation between Fulcrum Therapeutics and Icad

Given the investment horizon of 90 days Fulcrum Therapeutics is expected to generate 1.04 times more return on investment than Icad. However, Fulcrum Therapeutics is 1.04 times more volatile than icad inc. It trades about 0.03 of its potential returns per unit of risk. icad inc is currently generating about 0.03 per unit of risk. If you would invest  544.00  in Fulcrum Therapeutics on September 4, 2024 and sell it today you would lose (156.00) from holding Fulcrum Therapeutics or give up 28.68% of portfolio value over 90 days.

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

Fulcrum Therapeutics  vs.  icad inc

Fulcrum Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

icad inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in icad inc are ranked lower than 5 (%) 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 Fulcrum Therapeutics and Icad

The main advantage of trading using opposite Fulcrum Therapeutics and Icad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Therapeutics 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 Fulcrum Therapeutics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.