Correlation Between Electrocore LLC and Vyne Therapeutics
Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Vyne Therapeutics 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 Vyne Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electrocore LLC and Vyne Therapeutics, you can compare the effects of market volatilities on Electrocore LLC and Vyne Therapeutics 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 Vyne Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Vyne Therapeutics.
Diversification Opportunities for Electrocore LLC and Vyne Therapeutics
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Electrocore and Vyne is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Vyne Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vyne Therapeutics 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 Vyne Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vyne Therapeutics has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Vyne Therapeutics go up and down completely randomly.
Pair Corralation between Electrocore LLC and Vyne Therapeutics
Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.67 times more return on investment than Vyne Therapeutics. However, Electrocore LLC is 1.67 times more volatile than Vyne Therapeutics. It trades about 0.1 of its potential returns per unit of risk. Vyne Therapeutics is currently generating about 0.12 per unit of risk. If you would invest 1,110 in Electrocore LLC on August 30, 2024 and sell it today you would earn a total of 115.00 from holding Electrocore LLC or generate 10.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electrocore LLC vs. Vyne Therapeutics
Performance |
| Timeline |
| Electrocore LLC |
| Vyne Therapeutics |
Electrocore LLC and Vyne Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electrocore LLC and Vyne Therapeutics
The main advantage of trading using opposite Electrocore LLC and Vyne Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Vyne Therapeutics 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 Vyne Therapeutics will offset losses from the drop in Vyne Therapeutics' long position.| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
| Vyne Therapeutics vs. Bright Minds Biosciences | Vyne Therapeutics vs. HP Inc | Vyne Therapeutics vs. Intel | Vyne Therapeutics vs. Chevron Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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