Correlation Between Electrocore LLC and Owens Minor

Can any of the company-specific risk be diversified away by investing in both Electrocore LLC and Owens Minor 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 Electrocore LLC and Owens Minor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Electrocore LLC and Owens Minor, you can compare the effects of market volatilities on Electrocore LLC and Owens Minor 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 Electrocore LLC with a short position of Owens Minor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electrocore LLC and Owens Minor.

Diversification Opportunities for Electrocore LLC and Owens Minor

0.2

Correlation Coefficient

Electrocore LLC  Owens Minor

Modest diversification

The 3 months correlation between Electrocore and Owens is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Owens Minor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Minor and Electrocore LLC 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 Electrocore LLC are associated (or correlated) with Owens Minor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Minor has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Owens Minor go up and down completely randomly.

Pair Corralation between Electrocore LLC and Owens Minor

Given the investment horizon of 90 days Electrocore LLC is expected to under-perform the Owens Minor. But the stock apears to be less risky and, when comparing its historical volatility, Electrocore LLC is 1.47 times less risky than Owens Minor. The stock trades about -0.28 of its potential returns per unit of risk. The Owens Minor is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  1,266  in Owens Minor on December 29, 2024 and sell it today you would lose (408.00) from holding Owens Minor or give up 32.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Electrocore LLC  vs.  Owens Minor

Electrocore LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electrocore LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Owens Minor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Owens Minor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Electrocore LLC and Owens Minor

The main advantage of trading using opposite Electrocore LLC and Owens Minor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electrocore LLC position performs unexpectedly, Owens Minor 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 Owens Minor will offset losses from the drop in Owens Minor's long position.

The idea behind Electrocore LLC and Owens Minor 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.

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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.