Correlation Between Electromed and Delcath Systems
Can any of the company-specific risk be diversified away by investing in both Electromed and Delcath Systems 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 Delcath Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Delcath Systems, you can compare the effects of market volatilities on Electromed and Delcath Systems 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 Delcath Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Delcath Systems.
Diversification Opportunities for Electromed and Delcath Systems
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Electromed and Delcath is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Delcath Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delcath Systems 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 Delcath Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delcath Systems has no effect on the direction of Electromed i.e., Electromed and Delcath Systems go up and down completely randomly.
Pair Corralation between Electromed and Delcath Systems
Given the investment horizon of 90 days Electromed is expected to generate 0.76 times more return on investment than Delcath Systems. However, Electromed is 1.31 times less risky than Delcath Systems. It trades about 0.22 of its potential returns per unit of risk. Delcath Systems is currently generating about 0.12 per unit of risk. If you would invest 1,462 in Electromed on August 29, 2024 and sell it today you would earn a total of 1,644 from holding Electromed or generate 112.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Delcath Systems
Performance |
| Timeline |
| Electromed |
| Delcath Systems |
Electromed and Delcath Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Delcath Systems
The main advantage of trading using opposite Electromed and Delcath Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, Delcath Systems 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 Delcath Systems will offset losses from the drop in Delcath Systems' long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| Delcath Systems vs. Neuropace | Delcath Systems vs. SurModics | Delcath Systems vs. CVRx Inc | Delcath Systems vs. LivaNova PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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