Correlation Between Electromedical Technologies and Vivos Therapeutics
Can any of the company-specific risk be diversified away by investing in both Electromedical Technologies and Vivos Therapeutics 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 Vivos Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromedical Technologies and Vivos Therapeutics, you can compare the effects of market volatilities on Electromedical Technologies and Vivos Therapeutics 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 Vivos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromedical Technologies and Vivos Therapeutics.
Diversification Opportunities for Electromedical Technologies and Vivos Therapeutics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electromedical and Vivos is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Electromedical Technologies and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics 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 Vivos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Therapeutics has no effect on the direction of Electromedical Technologies i.e., Electromedical Technologies and Vivos Therapeutics go up and down completely randomly.
Pair Corralation between Electromedical Technologies and Vivos Therapeutics
Given the investment horizon of 90 days Electromedical Technologies is expected to generate 2.21 times more return on investment than Vivos Therapeutics. However, Electromedical Technologies is 2.21 times more volatile than Vivos Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Vivos Therapeutics is currently generating about -0.01 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electromedical Technologies vs. Vivos Therapeutics
Performance |
| Timeline |
| Electromedical Technologies |
| Vivos Therapeutics |
Electromedical Technologies and Vivos Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electromedical Technologies and Vivos Therapeutics
The main advantage of trading using opposite Electromedical Technologies and Vivos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromedical Technologies position performs unexpectedly, Vivos Therapeutics 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 Vivos Therapeutics will offset losses from the drop in Vivos Therapeutics' long position.| Electromedical Technologies vs. Abbott Laboratories | Electromedical Technologies vs. Stryker | Electromedical Technologies vs. Boston Scientific Corp | Electromedical Technologies vs. Medtronic PLC |
| Vivos Therapeutics vs. Avita Medical | Vivos Therapeutics vs. Inogen Inc | Vivos Therapeutics vs. Apyx 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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