Correlation Between Electromed and ATI Physical
Can any of the company-specific risk be diversified away by investing in both Electromed and ATI Physical 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 Electromed and ATI Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and ATI Physical Therapy, you can compare the effects of market volatilities on Electromed and ATI Physical 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 Electromed with a short position of ATI Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and ATI Physical.
Diversification Opportunities for Electromed and ATI Physical
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electromed and ATI is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy and Electromed 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 Electromed are associated (or correlated) with ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Electromed i.e., Electromed and ATI Physical go up and down completely randomly.
Pair Corralation between Electromed and ATI Physical
Given the investment horizon of 90 days Electromed is expected to generate 0.43 times more return on investment than ATI Physical. However, Electromed is 2.32 times less risky than ATI Physical. It trades about 0.34 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.28 per unit of risk. If you would invest 1,725 in Electromed on September 2, 2024 and sell it today you would earn a total of 1,353 from holding Electromed or generate 78.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. ATI Physical Therapy
Performance |
| Timeline |
| Electromed |
| ATI Physical Therapy |
Electromed and ATI Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and ATI Physical
The main advantage of trading using opposite Electromed and ATI Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, ATI Physical 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 ATI Physical will offset losses from the drop in ATI Physical's long position.| Electromed vs. Profound Medical Corp | Electromed vs. Si Bone | Electromed vs. Nevro Corp | Electromed vs. Orthopediatrics Corp |
| ATI Physical vs. Universal Health Services | ATI Physical vs. Lifestance Health Group | ATI Physical vs. Select Medical Holdings | ATI Physical vs. Acadia Healthcare |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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