Correlation Between Koninklijke Philips and Electrocore LLC
Can any of the company-specific risk be diversified away by investing in both Koninklijke Philips and Electrocore LLC 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 Koninklijke Philips and Electrocore LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Philips NV and Electrocore LLC, you can compare the effects of market volatilities on Koninklijke Philips and Electrocore LLC 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 Koninklijke Philips with a short position of Electrocore LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Philips and Electrocore LLC.
Diversification Opportunities for Koninklijke Philips and Electrocore LLC
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and Electrocore is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and Electrocore LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrocore LLC and Koninklijke Philips 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 Koninklijke Philips NV are associated (or correlated) with Electrocore LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrocore LLC has no effect on the direction of Koninklijke Philips i.e., Koninklijke Philips and Electrocore LLC go up and down completely randomly.
Pair Corralation between Koninklijke Philips and Electrocore LLC
Considering the 90-day investment horizon Koninklijke Philips NV is expected to under-perform the Electrocore LLC. But the stock apears to be less risky and, when comparing its historical volatility, Koninklijke Philips NV is 1.88 times less risky than Electrocore LLC. The stock trades about -0.21 of its potential returns per unit of risk. The Electrocore LLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 984.00 in Electrocore LLC on August 24, 2024 and sell it today you would earn a total of 8.00 from holding Electrocore LLC or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Philips NV vs. Electrocore LLC
Performance |
| Timeline |
| Koninklijke Philips |
| Electrocore LLC |
Koninklijke Philips and Electrocore LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Philips and Electrocore LLC
The main advantage of trading using opposite Koninklijke Philips and Electrocore LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Philips position performs unexpectedly, Electrocore LLC 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 Electrocore LLC will offset losses from the drop in Electrocore LLC's long position.| Koninklijke Philips vs. ZimVie Inc | Koninklijke Philips vs. Stryker | Koninklijke Philips vs. Boston Scientific Corp | Koninklijke Philips vs. STERIS plc |
| Electrocore LLC vs. STRATA Skin Sciences | Electrocore LLC vs. Sight Sciences | Electrocore LLC vs. Neuropace | Electrocore LLC vs. IRIDEX |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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