Correlation Between Electromed and Elutia
Can any of the company-specific risk be diversified away by investing in both Electromed and Elutia 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 Elutia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Elutia Inc, you can compare the effects of market volatilities on Electromed and Elutia 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 Elutia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Elutia.
Diversification Opportunities for Electromed and Elutia
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Electromed and Elutia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia 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 Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Electromed i.e., Electromed and Elutia go up and down completely randomly.
Pair Corralation between Electromed and Elutia
Given the investment horizon of 90 days Electromed is expected to generate 0.5 times more return on investment than Elutia. However, Electromed is 2.02 times less risky than Elutia. It trades about 0.08 of its potential returns per unit of risk. Elutia Inc is currently generating about 0.03 per unit of risk. If you would invest 1,049 in Electromed on September 20, 2024 and sell it today you would earn a total of 1,763 from holding Electromed or generate 168.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Elutia Inc
Performance |
| Timeline |
| Electromed |
| Elutia Inc |
Electromed and Elutia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Elutia
The main advantage of trading using opposite Electromed and Elutia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, Elutia 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 Elutia will offset losses from the drop in Elutia'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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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