Correlation Between Electrocore LLC and Catheter Precision
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Catheter Precision 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 Catheter Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Catheter Precision, you can compare the effects of market volatilities on Electrocore LLC and Catheter Precision 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 Catheter Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Catheter Precision.
Diversification Opportunities for Electrocore LLC and Catheter Precision
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Electrocore and Catheter is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Catheter Precision go up and down completely randomly.
Pair Corralation between Electrocore LLC and Catheter Precision
Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.24 times more return on investment than Catheter Precision. However, Electrocore LLC is 1.24 times more volatile than Catheter Precision. It trades about -0.09 of its potential returns per unit of risk. Catheter Precision is currently generating about -0.22 per unit of risk. If you would invest 1,600 in Electrocore LLC on December 7, 2024 and sell it today you would lose (152.00) from holding Electrocore LLC or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. Catheter Precision
Performance |
| Timeline |
| Electrocore LLC |
| Catheter Precision |
Electrocore LLC and Catheter Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Catheter Precision
The main advantage of trading using opposite Electrocore LLC and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Catheter Precision 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 Catheter Precision will offset losses from the drop in Catheter Precision's long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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