Correlation Between Delcath Systems and Electromed
Can any of the company-specific risk be diversified away by investing in both Delcath Systems and Electromed 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 Delcath Systems and Electromed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delcath Systems and Electromed, you can compare the effects of market volatilities on Delcath Systems and Electromed 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 Delcath Systems with a short position of Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delcath Systems and Electromed.
Diversification Opportunities for Delcath Systems and Electromed
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Delcath and Electromed is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Delcath Systems and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and Delcath Systems 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 Delcath Systems are associated (or correlated) with Electromed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromed has no effect on the direction of Delcath Systems i.e., Delcath Systems and Electromed go up and down completely randomly.
Pair Corralation between Delcath Systems and Electromed
Given the investment horizon of 90 days Delcath Systems is expected to generate 1.46 times less return on investment than Electromed. In addition to that, Delcath Systems is 1.31 times more volatile than Electromed. It trades about 0.12 of its total potential returns per unit of risk. Electromed is currently generating about 0.22 per unit of volatility. If you would invest 1,462 in Electromed on August 29, 2024 and sell it today you would earn a total of 1,644 from holding Electromed or generate 112.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delcath Systems vs. Electromed
Performance |
| Timeline |
| Delcath Systems |
| Electromed |
Delcath Systems and Electromed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delcath Systems and Electromed
The main advantage of trading using opposite Delcath Systems and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delcath Systems position performs unexpectedly, Electromed 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 Electromed will offset losses from the drop in Electromed's long position.| Delcath Systems vs. Neuropace | Delcath Systems vs. SurModics | Delcath Systems vs. CVRx Inc | Delcath Systems vs. LivaNova PLC |
| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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