Correlation Between Electromed and IRhythm Technologies
Can any of the company-specific risk be diversified away by investing in both Electromed and IRhythm Technologies 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 IRhythm Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and iRhythm Technologies, you can compare the effects of market volatilities on Electromed and IRhythm Technologies 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 IRhythm Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and IRhythm Technologies.
Diversification Opportunities for Electromed and IRhythm Technologies
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Electromed and IRhythm is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and iRhythm Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRhythm Technologies 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 IRhythm Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRhythm Technologies has no effect on the direction of Electromed i.e., Electromed and IRhythm Technologies go up and down completely randomly.
Pair Corralation between Electromed and IRhythm Technologies
Given the investment horizon of 90 days Electromed is expected to generate 0.7 times more return on investment than IRhythm Technologies. However, Electromed is 1.44 times less risky than IRhythm Technologies. It trades about 0.5 of its potential returns per unit of risk. iRhythm Technologies is currently generating about 0.1 per unit of risk. If you would invest 2,238 in Electromed on August 27, 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. iRhythm Technologies
Performance |
| Timeline |
| Electromed |
| iRhythm Technologies |
Electromed and IRhythm Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and IRhythm Technologies
The main advantage of trading using opposite Electromed and IRhythm Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, IRhythm Technologies 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 IRhythm Technologies will offset losses from the drop in IRhythm Technologies' long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| IRhythm Technologies vs. Heartbeam | IRhythm Technologies vs. EUDA Health Holdings | IRhythm Technologies vs. Nutex Health | IRhythm Technologies 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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