Correlation Between Electromed and USA Equities
Can any of the company-specific risk be diversified away by investing in both Electromed and USA Equities 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 USA Equities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromed and USA Equities Corp, you can compare the effects of market volatilities on Electromed and USA Equities 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 USA Equities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromed and USA Equities.
Diversification Opportunities for Electromed and USA Equities
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electromed and USA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and USA Equities Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Equities Corp 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 USA Equities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Equities Corp has no effect on the direction of Electromed i.e., Electromed and USA Equities go up and down completely randomly.
Pair Corralation between Electromed and USA Equities
Given the investment horizon of 90 days Electromed is expected to generate 1.54 times less return on investment than USA Equities. But when comparing it to its historical volatility, Electromed is 5.11 times less risky than USA Equities. It trades about 0.22 of its potential returns per unit of risk. USA Equities Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18.00 in USA Equities Corp on August 29, 2024 and sell it today you would earn a total of 0.00 from holding USA Equities Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromed vs. USA Equities Corp
Performance |
| Timeline |
| Electromed |
| USA Equities Corp |
Electromed and USA Equities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromed and USA Equities
The main advantage of trading using opposite Electromed and USA Equities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromed position performs unexpectedly, USA Equities 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 USA Equities will offset losses from the drop in USA Equities' long position.| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | Electromed vs. Paragon 28 |
| USA Equities vs. Brainsway | USA Equities vs. Venus Concept | USA Equities vs. Tactile Systems Technology | USA Equities vs. Icecure Medical |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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