Correlation Between Electrocore LLC and Adapthealth Corp
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Adapthealth Corp 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 Electrocore LLC and Adapthealth Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Adapthealth Corp, you can compare the effects of market volatilities on Electrocore LLC and Adapthealth Corp 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 Electrocore LLC with a short position of Adapthealth Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Adapthealth Corp.
Diversification Opportunities for Electrocore LLC and Adapthealth Corp
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electrocore and Adapthealth is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Adapthealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adapthealth Corp and Electrocore LLC 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 Electrocore LLC are associated (or correlated) with Adapthealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adapthealth Corp has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Adapthealth Corp go up and down completely randomly.
Pair Corralation between Electrocore LLC and Adapthealth Corp
Given the investment horizon of 90 days Electrocore LLC is expected to generate 0.97 times more return on investment than Adapthealth Corp. However, Electrocore LLC is 1.03 times less risky than Adapthealth Corp. It trades about 0.07 of its potential returns per unit of risk. Adapthealth Corp is currently generating about 0.06 per unit of risk. If you would invest 750.00 in Electrocore LLC on August 29, 2024 and sell it today you would earn a total of 396.00 from holding Electrocore LLC or generate 52.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. Adapthealth Corp
Performance |
| Timeline |
| Electrocore LLC |
| Adapthealth Corp |
Electrocore LLC and Adapthealth Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Adapthealth Corp
The main advantage of trading using opposite Electrocore LLC and Adapthealth Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Adapthealth Corp 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 Adapthealth Corp will offset losses from the drop in Adapthealth Corp's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| Adapthealth Corp vs. Axogen Inc | Adapthealth Corp vs. Artivion | Adapthealth Corp vs. Integer Holdings Corp | Adapthealth Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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