Correlation Between Orthofix Medical and Electromed
Can any of the company-specific risk be diversified away by investing in both Orthofix Medical 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 Orthofix Medical and Electromed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orthofix Medical and Electromed, you can compare the effects of market volatilities on Orthofix Medical 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 Orthofix Medical with a short position of Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orthofix Medical and Electromed.
Diversification Opportunities for Orthofix Medical and Electromed
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Orthofix and Electromed is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Orthofix Medical and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and Orthofix Medical 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 Orthofix Medical 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 Orthofix Medical i.e., Orthofix Medical and Electromed go up and down completely randomly.
Pair Corralation between Orthofix Medical and Electromed
Given the investment horizon of 90 days Orthofix Medical is expected to generate 0.93 times more return on investment than Electromed. However, Orthofix Medical is 1.08 times less risky than Electromed. It trades about -0.25 of its potential returns per unit of risk. Electromed is currently generating about -0.29 per unit of risk. If you would invest 1,815 in Orthofix Medical on December 26, 2024 and sell it today you would lose (177.00) from holding Orthofix Medical or give up 9.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orthofix Medical vs. Electromed
Performance |
| Timeline |
| Orthofix Medical |
| Electromed |
Orthofix Medical and Electromed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orthofix Medical and Electromed
The main advantage of trading using opposite Orthofix Medical and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orthofix Medical 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.| Orthofix Medical vs. Globus Medical | Orthofix Medical vs. CONMED | Orthofix Medical vs. Alphatec Holdings | Orthofix Medical vs. LivaNova PLC |
| Electromed vs. Neuropace | Electromed vs. Orthopediatrics Corp | Electromed vs. SurModics | 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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