Correlation Between Electromed and Surgery Partners
Can any of the company-specific risk be diversified away by investing in both Electromed and Surgery Partners 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 Surgery Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Surgery Partners, you can compare the effects of market volatilities on Electromed and Surgery Partners 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 Surgery Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Surgery Partners.
Diversification Opportunities for Electromed and Surgery Partners
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electromed and Surgery is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Surgery Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgery Partners 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 Surgery Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgery Partners has no effect on the direction of Electromed i.e., Electromed and Surgery Partners go up and down completely randomly.
Pair Corralation between Electromed and Surgery Partners
Given the investment horizon of 90 days Electromed is expected to generate 0.7 times more return on investment than Surgery Partners. However, Electromed is 1.43 times less risky than Surgery Partners. It trades about 0.47 of its potential returns per unit of risk. Surgery Partners is currently generating about -0.27 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 741.00 from holding Electromed or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Surgery Partners
Performance |
| Timeline |
| Electromed |
| Surgery Partners |
Electromed and Surgery Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Surgery Partners
The main advantage of trading using opposite Electromed and Surgery Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, Surgery Partners 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 Surgery Partners will offset losses from the drop in Surgery Partners' long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| Surgery Partners vs. Pennant Group | Surgery Partners vs. The Ensign Group | Surgery Partners vs. Encompass Health Corp | Surgery Partners vs. Healthcare Services Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |