Correlation Between Electrocore LLC and Neuropace
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Neuropace 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 Neuropace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Neuropace, you can compare the effects of market volatilities on Electrocore LLC and Neuropace 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 Neuropace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Neuropace.
Diversification Opportunities for Electrocore LLC and Neuropace
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electrocore and Neuropace is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Neuropace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuropace 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 Neuropace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuropace has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Neuropace go up and down completely randomly.
Pair Corralation between Electrocore LLC and Neuropace
Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.19 times more return on investment than Neuropace. However, Electrocore LLC is 1.19 times more volatile than Neuropace. It trades about -0.03 of its potential returns per unit of risk. Neuropace is currently generating about -0.05 per unit of risk. If you would invest 1,616 in Electrocore LLC on November 29, 2024 and sell it today you would lose (66.00) from holding Electrocore LLC or give up 4.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. Neuropace
Performance |
| Timeline |
| Electrocore LLC |
| Neuropace |
Electrocore LLC and Neuropace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Neuropace
The main advantage of trading using opposite Electrocore LLC and Neuropace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Neuropace 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 Neuropace will offset losses from the drop in Neuropace's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| Neuropace vs. Electromed | Neuropace vs. Orthopediatrics Corp | Neuropace vs. SurModics | Neuropace 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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