Correlation Between Icecure Medical and Covalon Technologies
Can any of the company-specific risk be diversified away by investing in both Icecure Medical and Covalon Technologies 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 Icecure Medical and Covalon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icecure Medical and Covalon Technologies, you can compare the effects of market volatilities on Icecure Medical and Covalon Technologies 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 Icecure Medical with a short position of Covalon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icecure Medical and Covalon Technologies.
Diversification Opportunities for Icecure Medical and Covalon Technologies
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icecure and Covalon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Icecure Medical and Covalon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covalon Technologies and Icecure Medical 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 Icecure Medical are associated (or correlated) with Covalon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covalon Technologies has no effect on the direction of Icecure Medical i.e., Icecure Medical and Covalon Technologies go up and down completely randomly.
Pair Corralation between Icecure Medical and Covalon Technologies
Given the investment horizon of 90 days Icecure Medical is expected to generate 1.89 times more return on investment than Covalon Technologies. However, Icecure Medical is 1.89 times more volatile than Covalon Technologies. It trades about 0.1 of its potential returns per unit of risk. Covalon Technologies is currently generating about 0.09 per unit of risk. If you would invest 64.00 in Icecure Medical on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Icecure Medical or generate 29.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Icecure Medical vs. Covalon Technologies
Performance |
Timeline |
Icecure Medical |
Covalon Technologies |
Icecure Medical and Covalon Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Icecure Medical and Covalon Technologies
The main advantage of trading using opposite Icecure Medical and Covalon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icecure Medical position performs unexpectedly, Covalon Technologies 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 Covalon Technologies will offset losses from the drop in Covalon Technologies' long position.Icecure Medical vs. BrainsWay | Icecure Medical vs. SurModics | Icecure Medical vs. STRATA Skin Sciences | Icecure Medical vs. Tenon Medical |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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