Correlation Between Electromedical Technologies and Cytosorbents Crp
Can any of the company-specific risk be diversified away by investing in both Electromedical Technologies and Cytosorbents Crp 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 Electromedical Technologies and Cytosorbents Crp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromedical Technologies and Cytosorbents Crp, you can compare the effects of market volatilities on Electromedical Technologies and Cytosorbents Crp 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 Electromedical Technologies with a short position of Cytosorbents Crp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromedical Technologies and Cytosorbents Crp.
Diversification Opportunities for Electromedical Technologies and Cytosorbents Crp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Electromedical and Cytosorbents is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Electromedical Technologies and Cytosorbents Crp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytosorbents Crp and Electromedical Technologies 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 Electromedical Technologies are associated (or correlated) with Cytosorbents Crp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytosorbents Crp has no effect on the direction of Electromedical Technologies i.e., Electromedical Technologies and Cytosorbents Crp go up and down completely randomly.
Pair Corralation between Electromedical Technologies and Cytosorbents Crp
Given the investment horizon of 90 days Electromedical Technologies is expected to generate 2.74 times more return on investment than Cytosorbents Crp. However, Electromedical Technologies is 2.74 times more volatile than Cytosorbents Crp. It trades about 0.04 of its potential returns per unit of risk. Cytosorbents Crp is currently generating about -0.03 per unit of risk. If you would invest 0.10 in Electromedical Technologies on September 20, 2024 and sell it today you would lose (0.07) from holding Electromedical Technologies or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromedical Technologies vs. Cytosorbents Crp
Performance |
| Timeline |
| Electromedical Technologies |
| Cytosorbents Crp |
Electromedical Technologies and Cytosorbents Crp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromedical Technologies and Cytosorbents Crp
The main advantage of trading using opposite Electromedical Technologies and Cytosorbents Crp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromedical Technologies position performs unexpectedly, Cytosorbents Crp 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 Cytosorbents Crp will offset losses from the drop in Cytosorbents Crp's long position.| Electromedical Technologies vs. Abbott Laboratories | Electromedical Technologies vs. Stryker | Electromedical Technologies vs. Boston Scientific Corp | Electromedical Technologies vs. Medtronic PLC |
| Cytosorbents Crp vs. LivaNova PLC | Cytosorbents Crp vs. Electromed | Cytosorbents Crp vs. Orthopediatrics Corp | Cytosorbents Crp vs. SurModics |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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