Correlation Between Electromed and Iradimed
Can any of the company-specific risk be diversified away by investing in both Electromed and Iradimed 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 Iradimed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Iradimed Co, you can compare the effects of market volatilities on Electromed and Iradimed 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 Iradimed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Iradimed.
Diversification Opportunities for Electromed and Iradimed
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electromed and Iradimed is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Iradimed Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iradimed 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 Iradimed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iradimed has no effect on the direction of Electromed i.e., Electromed and Iradimed go up and down completely randomly.
Pair Corralation between Electromed and Iradimed
Given the investment horizon of 90 days Electromed is expected to generate 1.83 times more return on investment than Iradimed. However, Electromed is 1.83 times more volatile than Iradimed Co. It trades about 0.16 of its potential returns per unit of risk. Iradimed Co is currently generating about 0.06 per unit of risk. If you would invest 1,002 in Electromed on November 3, 2024 and sell it today you would earn a total of 2,438 from holding Electromed or generate 243.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Iradimed Co
Performance |
| Timeline |
| Electromed |
| Iradimed |
Electromed and Iradimed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Iradimed
The main advantage of trading using opposite Electromed and Iradimed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, Iradimed 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 Iradimed will offset losses from the drop in Iradimed's long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| Iradimed vs. Pulmonx Corp | Iradimed vs. Orthofix Medical | Iradimed vs. Neuropace | Iradimed vs. Integer Holdings Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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