Correlation Between Electrocore LLC and Fonar
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Fonar 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 Fonar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Fonar, you can compare the effects of market volatilities on Electrocore LLC and Fonar 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 Fonar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Fonar.
Diversification Opportunities for Electrocore LLC and Fonar
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electrocore and Fonar is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar 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 Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Fonar go up and down completely randomly.
Pair Corralation between Electrocore LLC and Fonar
Given the investment horizon of 90 days Electrocore LLC is expected to generate 3.16 times less return on investment than Fonar. In addition to that, Electrocore LLC is 2.38 times more volatile than Fonar. It trades about 0.03 of its total potential returns per unit of risk. Fonar is currently generating about 0.22 per unit of volatility. If you would invest 1,455 in Fonar on September 3, 2024 and sell it today you would earn a total of 192.00 from holding Fonar or generate 13.2% 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. Fonar
Performance |
| Timeline |
| Electrocore LLC |
| Fonar |
Electrocore LLC and Fonar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Fonar
The main advantage of trading using opposite Electrocore LLC and Fonar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Fonar 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 Fonar will offset losses from the drop in Fonar's long position.| Electrocore LLC vs. Tandem Diabetes Care | Electrocore LLC vs. Inspire Medical Systems | Electrocore LLC vs. Penumbra | Electrocore LLC vs. Insulet |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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