Correlation Between Electromed and TechnoPro Holdings
Can any of the company-specific risk be diversified away by investing in both Electromed and TechnoPro Holdings 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 TechnoPro Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and TechnoPro Holdings, you can compare the effects of market volatilities on Electromed and TechnoPro Holdings 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 TechnoPro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and TechnoPro Holdings.
Diversification Opportunities for Electromed and TechnoPro Holdings
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electromed and TechnoPro is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and TechnoPro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoPro Holdings 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 TechnoPro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoPro Holdings has no effect on the direction of Electromed i.e., Electromed and TechnoPro Holdings go up and down completely randomly.
Pair Corralation between Electromed and TechnoPro Holdings
Given the investment horizon of 90 days Electromed is expected to generate 1.41 times more return on investment than TechnoPro Holdings. However, Electromed is 1.41 times more volatile than TechnoPro Holdings. It trades about 0.09 of its potential returns per unit of risk. TechnoPro Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,009 in Electromed on September 2, 2024 and sell it today you would earn a total of 2,069 from holding Electromed or generate 205.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. TechnoPro Holdings
Performance |
| Timeline |
| Electromed |
| TechnoPro Holdings |
Electromed and TechnoPro Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and TechnoPro Holdings
The main advantage of trading using opposite Electromed and TechnoPro Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, TechnoPro Holdings 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 TechnoPro Holdings will offset losses from the drop in TechnoPro Holdings' long position.| Electromed vs. Profound Medical Corp | Electromed vs. Si Bone | Electromed vs. Nevro Corp | Electromed vs. Orthopediatrics Corp |
| TechnoPro Holdings vs. The Caldwell Partners | TechnoPro Holdings vs. Futuris Company | TechnoPro Holdings vs. Kelly Services A | TechnoPro Holdings vs. Heidrick Struggles International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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