Correlation Between Electromed and Centene Corp
Can any of the company-specific risk be diversified away by investing in both Electromed and Centene Corp 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 Centene Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Centene Corp, you can compare the effects of market volatilities on Electromed and Centene Corp 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 Centene Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Centene Corp.
Diversification Opportunities for Electromed and Centene Corp
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electromed and Centene is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Centene Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene Corp 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 Centene Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene Corp has no effect on the direction of Electromed i.e., Electromed and Centene Corp go up and down completely randomly.
Pair Corralation between Electromed and Centene Corp
Given the investment horizon of 90 days Electromed is expected to generate 1.77 times more return on investment than Centene Corp. However, Electromed is 1.77 times more volatile than Centene Corp. It trades about 0.09 of its potential returns per unit of risk. Centene Corp is currently generating about -0.03 per unit of risk. If you would invest 1,001 in Electromed on August 30, 2024 and sell it today you would earn a total of 2,105 from holding Electromed or generate 210.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Centene Corp
Performance |
| Timeline |
| Electromed |
| Centene Corp |
Electromed and Centene Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Centene Corp
The main advantage of trading using opposite Electromed and Centene Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, Centene Corp 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 Centene Corp will offset losses from the drop in Centene Corp's long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| Centene Corp vs. Humana Inc | Centene Corp vs. Elevance Health | Centene Corp vs. UnitedHealth Group Incorporated | Centene Corp vs. CVS Health 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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