Correlation Between Electromed and CONMED
Can any of the company-specific risk be diversified away by investing in both Electromed and CONMED 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 CONMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and CONMED, you can compare the effects of market volatilities on Electromed and CONMED 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 CONMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and CONMED.
Diversification Opportunities for Electromed and CONMED
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electromed and CONMED is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and CONMED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONMED 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 CONMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONMED has no effect on the direction of Electromed i.e., Electromed and CONMED go up and down completely randomly.
Pair Corralation between Electromed and CONMED
Given the investment horizon of 90 days Electromed is expected to generate 1.34 times more return on investment than CONMED. However, Electromed is 1.34 times more volatile than CONMED. It trades about 0.09 of its potential returns per unit of risk. CONMED is currently generating about 0.0 per unit of risk. If you would invest 1,044 in Electromed on August 28, 2024 and sell it today you would earn a total of 1,982 from holding Electromed or generate 189.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. CONMED
Performance |
| Timeline |
| Electromed |
| CONMED |
Electromed and CONMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and CONMED
The main advantage of trading using opposite Electromed and CONMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, CONMED 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 CONMED will offset losses from the drop in CONMED's long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
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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