Correlation Between Electromed and IRIDEX
Can any of the company-specific risk be diversified away by investing in both Electromed and IRIDEX 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 IRIDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and IRIDEX, you can compare the effects of market volatilities on Electromed and IRIDEX 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 IRIDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and IRIDEX.
Diversification Opportunities for Electromed and IRIDEX
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electromed and IRIDEX is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and IRIDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRIDEX 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 IRIDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRIDEX has no effect on the direction of Electromed i.e., Electromed and IRIDEX go up and down completely randomly.
Pair Corralation between Electromed and IRIDEX
Given the investment horizon of 90 days Electromed is expected to generate 0.36 times more return on investment than IRIDEX. However, Electromed is 2.77 times less risky than IRIDEX. It trades about 0.5 of its potential returns per unit of risk. IRIDEX is currently generating about 0.08 per unit of risk. If you would invest 2,238 in Electromed on August 28, 2024 and sell it today you would earn a total of 788.00 from holding Electromed or generate 35.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. IRIDEX
Performance |
| Timeline |
| Electromed |
| IRIDEX |
Electromed and IRIDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and IRIDEX
The main advantage of trading using opposite Electromed and IRIDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, IRIDEX 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 IRIDEX will offset losses from the drop in IRIDEX's long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| IRIDEX vs. Heartbeam | IRIDEX vs. EUDA Health Holdings | IRIDEX vs. Nutex Health | IRIDEX vs. Healthcare Triangle |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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