Correlation Between Electrocore LLC and Venus Concept
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Venus Concept 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 Venus Concept into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Venus Concept, you can compare the effects of market volatilities on Electrocore LLC and Venus Concept 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 Venus Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Venus Concept.
Diversification Opportunities for Electrocore LLC and Venus Concept
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electrocore and Venus is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Venus Concept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venus Concept 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 Venus Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venus Concept has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Venus Concept go up and down completely randomly.
Pair Corralation between Electrocore LLC and Venus Concept
Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.26 times more return on investment than Venus Concept. However, Electrocore LLC is 1.26 times more volatile than Venus Concept. It trades about 0.09 of its potential returns per unit of risk. Venus Concept is currently generating about -0.07 per unit of risk. If you would invest 1,334 in Electrocore LLC on September 12, 2024 and sell it today you would earn a total of 116.00 from holding Electrocore LLC or generate 8.7% 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. Venus Concept
Performance |
| Timeline |
| Electrocore LLC |
| Venus Concept |
Electrocore LLC and Venus Concept Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Venus Concept
The main advantage of trading using opposite Electrocore LLC and Venus Concept positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Venus Concept 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 Venus Concept will offset losses from the drop in Venus Concept's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| Venus Concept vs. Ainos Inc | Venus Concept vs. SurModics | Venus Concept vs. LENSAR Inc | Venus Concept vs. IRIDEX |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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