Correlation Between Akoya Biosciences and ICU Medical

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

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

Diversification Opportunities for Akoya Biosciences and ICU Medical

0.28

Correlation Coefficient

Akoya Biosciences  ICU Medical

Modest diversification

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

Pair Corralation between Akoya Biosciences and ICU Medical

Given the investment horizon of 90 days Akoya Biosciences is expected to generate 1.73 times more return on investment than ICU Medical. However, Akoya Biosciences is 1.73 times more volatile than ICU Medical. It trades about -0.02 of its potential returns per unit of risk. ICU Medical is currently generating about -0.03 per unit of risk. If you would invest  948.00  in Akoya Biosciences on January 31, 2024 and sell it today you would lose (562.00) from holding Akoya Biosciences or give up 59.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Akoya Biosciences  vs.  ICU Medical

Akoya Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akoya Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

ICU Medical

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICU Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, ICU Medical may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Akoya Biosciences and ICU Medical

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

The idea behind Akoya Biosciences and ICU 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.