Correlation Between Electromed and CVRx
Can any of the company-specific risk be diversified away by investing in both Electromed and CVRx 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 CVRx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and CVRx Inc, you can compare the effects of market volatilities on Electromed and CVRx 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 CVRx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and CVRx.
Diversification Opportunities for Electromed and CVRx
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electromed and CVRx is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and CVRx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVRx Inc 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 CVRx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVRx Inc has no effect on the direction of Electromed i.e., Electromed and CVRx go up and down completely randomly.
Pair Corralation between Electromed and CVRx
Given the investment horizon of 90 days Electromed is expected to generate 0.48 times more return on investment than CVRx. However, Electromed is 2.06 times less risky than CVRx. It trades about 0.39 of its potential returns per unit of risk. CVRx Inc is currently generating about 0.14 per unit of risk. If you would invest 1,500 in Electromed on August 28, 2024 and sell it today you would earn a total of 1,526 from holding Electromed or generate 101.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. CVRx Inc
Performance |
| Timeline |
| Electromed |
| CVRx Inc |
Electromed and CVRx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and CVRx
The main advantage of trading using opposite Electromed and CVRx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, CVRx 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 CVRx will offset losses from the drop in CVRx'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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |