Correlation Between Electromed and NuVasive

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Can any of the company-specific risk be diversified away by investing in both Electromed and NuVasive 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 NuVasive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and NuVasive, you can compare the effects of market volatilities on Electromed and NuVasive 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 NuVasive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and NuVasive.

Diversification Opportunities for Electromed and NuVasive

ElectromedNuVasiveDiversified AwayElectromedNuVasiveDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Electromed and NuVasive is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and NuVasive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuVasive 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 NuVasive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuVasive has no effect on the direction of Electromed i.e., Electromed and NuVasive go up and down completely randomly.

Pair Corralation between Electromed and NuVasive

If you would invest  1,097  in Electromed on November 27, 2024 and sell it today you would earn a total of  1,600  from holding Electromed or generate 145.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Electromed  vs.  NuVasive

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15ELMD NUVA
       Timeline  
Electromed 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Electromed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb272829303132333435
NuVasive 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NuVasive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NuVasive is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Electromed and NuVasive Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.68-4.26-2.83-1.4-0.02351.362.774.185.597.01 0.0050.0100.0150.0200.0250.030
JavaScript chart by amCharts 3.21.15ELMD NUVA
       Returns  

Pair Trading with Electromed and NuVasive

The main advantage of trading using opposite Electromed and NuVasive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, NuVasive 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 NuVasive will offset losses from the drop in NuVasive's long position.
The idea behind Electromed and NuVasive pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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