Correlation Between Electrocore LLC and Varex Imaging
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Varex Imaging 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 Varex Imaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Varex Imaging Corp, you can compare the effects of market volatilities on Electrocore LLC and Varex Imaging 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 Varex Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Varex Imaging.
Diversification Opportunities for Electrocore LLC and Varex Imaging
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electrocore and Varex is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Varex Imaging Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varex Imaging Corp 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 Varex Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varex Imaging Corp has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Varex Imaging go up and down completely randomly.
Pair Corralation between Electrocore LLC and Varex Imaging
Given the investment horizon of 90 days Electrocore LLC is expected to generate 2.01 times more return on investment than Varex Imaging. However, Electrocore LLC is 2.01 times more volatile than Varex Imaging Corp. It trades about 0.08 of its potential returns per unit of risk. Varex Imaging Corp is currently generating about -0.01 per unit of risk. If you would invest 385.00 in Electrocore LLC on September 20, 2024 and sell it today you would earn a total of 1,008 from holding Electrocore LLC or generate 261.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. Varex Imaging Corp
Performance |
| Timeline |
| Electrocore LLC |
| Varex Imaging Corp |
Electrocore LLC and Varex Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Varex Imaging
The main advantage of trading using opposite Electrocore LLC and Varex Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Varex Imaging 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 Varex Imaging will offset losses from the drop in Varex Imaging's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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