Correlation Between Electrocore LLC and STRATA Skin
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and STRATA Skin 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 STRATA Skin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and STRATA Skin Sciences, you can compare the effects of market volatilities on Electrocore LLC and STRATA Skin 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 STRATA Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and STRATA Skin.
Diversification Opportunities for Electrocore LLC and STRATA Skin
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Electrocore and STRATA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and STRATA Skin Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATA Skin Sciences 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 STRATA Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATA Skin Sciences has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and STRATA Skin go up and down completely randomly.
Pair Corralation between Electrocore LLC and STRATA Skin
Given the investment horizon of 90 days Electrocore LLC is expected to generate 2.06 times more return on investment than STRATA Skin. However, Electrocore LLC is 2.06 times more volatile than STRATA Skin Sciences. It trades about 0.04 of its potential returns per unit of risk. STRATA Skin Sciences is currently generating about 0.05 per unit of risk. If you would invest 984.00 in Electrocore LLC on August 24, 2024 and sell it today you would earn a total of 8.00 from holding Electrocore LLC or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. STRATA Skin Sciences
Performance |
| Timeline |
| Electrocore LLC |
| STRATA Skin Sciences |
Electrocore LLC and STRATA Skin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and STRATA Skin
The main advantage of trading using opposite Electrocore LLC and STRATA Skin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, STRATA Skin 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 STRATA Skin will offset losses from the drop in STRATA Skin's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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