Correlation Between Varex Imaging and Electromed

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Varex Imaging 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 Varex Imaging and Electromed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varex Imaging Corp and Electromed, you can compare the effects of market volatilities on Varex Imaging 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 Varex Imaging with a short position of Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varex Imaging and Electromed.

Diversification Opportunities for Varex Imaging and Electromed

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Varex and Electromed is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and Varex Imaging 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 Varex Imaging Corp 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 Varex Imaging i.e., Varex Imaging and Electromed go up and down completely randomly.

Pair Corralation between Varex Imaging and Electromed

Given the investment horizon of 90 days Varex Imaging Corp is expected to under-perform the Electromed. But the stock apears to be less risky and, when comparing its historical volatility, Varex Imaging Corp is 1.33 times less risky than Electromed. The stock trades about -0.03 of its potential returns per unit of risk. The Electromed is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,002  in Electromed on November 3, 2024 and sell it today you would earn a total of  2,438  from holding Electromed or generate 243.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Varex Imaging Corp  vs.  Electromed

 Performance 
       Timeline  
Varex Imaging Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Varex Imaging Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Varex Imaging is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Electromed 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Electromed are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Electromed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Varex Imaging and Electromed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Varex Imaging and Electromed

The main advantage of trading using opposite Varex Imaging and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging 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.
The idea behind Varex Imaging Corp and Electromed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

Other Complementary Tools

Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Commodity Directory
Find actively traded commodities issued by global exchanges
CEOs Directory
Screen CEOs from public companies around the world
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Transaction History
View history of all your transactions and understand their impact on performance