Correlation Between Electromed and Si Bone
Can any of the company-specific risk be diversified away by investing in both Electromed and Si Bone 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 Si Bone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and Si Bone, you can compare the effects of market volatilities on Electromed and Si Bone 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 Si Bone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and Si Bone.
Diversification Opportunities for Electromed and Si Bone
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electromed and SIBN is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone 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 Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of Electromed i.e., Electromed and Si Bone go up and down completely randomly.
Pair Corralation between Electromed and Si Bone
Given the investment horizon of 90 days Electromed is expected to generate 0.56 times more return on investment than Si Bone. However, Electromed is 1.78 times less risky than Si Bone. It trades about 0.52 of its potential returns per unit of risk. Si Bone is currently generating about 0.03 per unit of risk. If you would invest 2,268 in Electromed on August 31, 2024 and sell it today you would earn a total of 838.00 from holding Electromed or generate 36.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. Si Bone
Performance |
| Timeline |
| Electromed |
| Si Bone |
Electromed and Si Bone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and Si Bone
The main advantage of trading using opposite Electromed and Si Bone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, Si Bone 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 Si Bone will offset losses from the drop in Si Bone's long position.| Electromed vs. Abbott Laboratories | Electromed vs. Medtronic PLC | Electromed vs. Edwards Lifesciences Corp | Electromed vs. ZimVie Inc |
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.
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