Correlation Between Lucid Diagnostics and Electromed
Can any of the company-specific risk be diversified away by investing in both Lucid Diagnostics and Electromed 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 Lucid Diagnostics and Electromed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Diagnostics and Electromed, you can compare the effects of market volatilities on Lucid Diagnostics and Electromed 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 Lucid Diagnostics with a short position of Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid Diagnostics and Electromed.
Diversification Opportunities for Lucid Diagnostics and Electromed
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lucid and Electromed is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Diagnostics and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and Lucid Diagnostics 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 Lucid Diagnostics are associated (or correlated) with Electromed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromed has no effect on the direction of Lucid Diagnostics i.e., Lucid Diagnostics and Electromed go up and down completely randomly.
Pair Corralation between Lucid Diagnostics and Electromed
Given the investment horizon of 90 days Lucid Diagnostics is expected to generate 4.15 times less return on investment than Electromed. In addition to that, Lucid Diagnostics is 1.13 times more volatile than Electromed. It trades about 0.05 of its total potential returns per unit of risk. Electromed is currently generating about 0.22 per unit of volatility. If you would invest 1,461 in Electromed on September 1, 2024 and sell it today you would earn a total of 1,617 from holding Electromed or generate 110.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Diagnostics vs. Electromed
Performance |
| Timeline |
| Lucid Diagnostics |
| Electromed |
Lucid Diagnostics and Electromed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid Diagnostics and Electromed
The main advantage of trading using opposite Lucid Diagnostics and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid Diagnostics position performs unexpectedly, Electromed 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 Electromed will offset losses from the drop in Electromed's long position.| Lucid Diagnostics vs. Inari Medical | Lucid Diagnostics vs. Beyond Air | Lucid Diagnostics vs. PAVmed Series Z | Lucid Diagnostics vs. Clearpoint Neuro |
| Electromed vs. Profound Medical Corp | Electromed vs. Si Bone | Electromed vs. Nevro Corp | Electromed vs. Paragon 28 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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