Correlation Between Electrocore LLC and EDAP TMS
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and EDAP TMS 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 EDAP TMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and EDAP TMS SA, you can compare the effects of market volatilities on Electrocore LLC and EDAP TMS 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 EDAP TMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and EDAP TMS.
Diversification Opportunities for Electrocore LLC and EDAP TMS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electrocore and EDAP is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA 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 EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and EDAP TMS go up and down completely randomly.
Pair Corralation between Electrocore LLC and EDAP TMS
Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.09 times more return on investment than EDAP TMS. However, Electrocore LLC is 1.09 times more volatile than EDAP TMS SA. It trades about 0.1 of its potential returns per unit of risk. EDAP TMS SA is currently generating about -0.07 per unit of risk. If you would invest 540.00 in Electrocore LLC on September 4, 2024 and sell it today you would earn a total of 568.00 from holding Electrocore LLC or generate 105.19% 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. EDAP TMS SA
Performance |
| Timeline |
| Electrocore LLC |
| EDAP TMS SA |
Electrocore LLC and EDAP TMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and EDAP TMS
The main advantage of trading using opposite Electrocore LLC and EDAP TMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, EDAP TMS 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 EDAP TMS will offset losses from the drop in EDAP TMS's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| EDAP TMS vs. Baxter International | EDAP TMS vs. West Pharmaceutical Services | EDAP TMS vs. ResMed Inc | EDAP TMS 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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