Correlation Between Electromed and DIH Holdings
Can any of the company-specific risk be diversified away by investing in both Electromed and DIH Holdings 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 DIH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and DIH Holdings US,, you can compare the effects of market volatilities on Electromed and DIH Holdings 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 DIH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and DIH Holdings.
Diversification Opportunities for Electromed and DIH Holdings
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electromed and DIH is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, 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 DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of Electromed i.e., Electromed and DIH Holdings go up and down completely randomly.
Pair Corralation between Electromed and DIH Holdings
Given the investment horizon of 90 days Electromed is expected to generate 0.41 times more return on investment than DIH Holdings. However, Electromed is 2.45 times less risky than DIH Holdings. It trades about 0.08 of its potential returns per unit of risk. DIH Holdings US, is currently generating about 0.03 per unit of risk. If you would invest 1,080 in Electromed on September 3, 2024 and sell it today you would earn a total of 1,930 from holding Electromed or generate 178.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 43.37% |
| Values | Daily Returns |
Electromed vs. DIH Holdings US,
Performance |
| Timeline |
| Electromed |
| DIH Holdings US, |
Electromed and DIH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and DIH Holdings
The main advantage of trading using opposite Electromed and DIH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, DIH Holdings 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 DIH Holdings will offset losses from the drop in DIH Holdings' long position.| Electromed vs. Tandem Diabetes Care | Electromed vs. Inspire Medical Systems | Electromed vs. Penumbra | Electromed vs. Insulet |
| DIH Holdings vs. Allegiant Travel | DIH Holdings vs. PGE Corp | DIH Holdings vs. CenterPoint Energy | DIH Holdings vs. NiSource |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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