Correlation Between Eargo, and Electromed
Can any of the company-specific risk be diversified away by investing in both Eargo, 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 Eargo, and Electromed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eargo, Inc and Electromed, you can compare the effects of market volatilities on Eargo, 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 Eargo, with a short position of Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eargo, and Electromed.
Diversification Opportunities for Eargo, and Electromed
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eargo, and Electromed is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eargo, Inc and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and Eargo, 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 Eargo, Inc 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 Eargo, i.e., Eargo, and Electromed go up and down completely randomly.
Pair Corralation between Eargo, and Electromed
If you would invest 2,277 in Electromed on September 4, 2024 and sell it today you would earn a total of 733.00 from holding Electromed or generate 32.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Eargo, Inc vs. Electromed
Performance |
| Timeline |
| Eargo, Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Electromed |
Eargo, and Electromed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eargo, and Electromed
The main advantage of trading using opposite Eargo, and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eargo, 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.The idea behind Eargo, Inc and Electromed 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.| Electromed vs. Baxter International | Electromed vs. West Pharmaceutical Services | Electromed vs. ResMed Inc | Electromed vs. The Cooper Companies, |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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