Correlation Between STRATA Skin and Electrocore LLC
Can any of the company-specific risk be diversified away by investing in both STRATA Skin 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 STRATA Skin and Electrocore LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRATA Skin Sciences and Electrocore LLC, you can compare the effects of market volatilities on STRATA Skin 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 STRATA Skin with a short position of Electrocore LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATA Skin and Electrocore LLC.
Diversification Opportunities for STRATA Skin and Electrocore LLC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between STRATA and Electrocore is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding STRATA Skin Sciences and Electrocore LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrocore LLC and STRATA Skin 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 STRATA Skin Sciences 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 STRATA Skin i.e., STRATA Skin and Electrocore LLC go up and down completely randomly.
Pair Corralation between STRATA Skin and Electrocore LLC
Given the investment horizon of 90 days STRATA Skin Sciences is expected to under-perform the Electrocore LLC. In addition to that, STRATA Skin is 1.38 times more volatile than Electrocore LLC. It trades about -0.02 of its total potential returns per unit of risk. Electrocore LLC is currently generating about 0.06 per unit of volatility. If you would invest 554.00 in Electrocore LLC on August 27, 2024 and sell it today you would earn a total of 581.00 from holding Electrocore LLC or generate 104.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRATA Skin Sciences vs. Electrocore LLC
Performance |
| Timeline |
| STRATA Skin Sciences |
| Electrocore LLC |
STRATA Skin and Electrocore LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRATA Skin and Electrocore LLC
The main advantage of trading using opposite STRATA Skin and Electrocore LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATA Skin 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.| STRATA Skin vs. Axogen Inc | STRATA Skin vs. Ainos Inc | STRATA Skin vs. LENSAR Inc | STRATA Skin vs. Nexalin Technology |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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