Correlation Between Electromed and JIN MEDICAL

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

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

Diversification Opportunities for Electromed and JIN MEDICAL

0.34

Correlation Coefficient

Electromed  JIN MEDICAL

Weak diversification

The 3 months correlation between Electromed and JIN is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and JIN MEDICAL INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIN MEDICAL INTERNATIONAL and Electromed 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 Electromed are associated (or correlated) with JIN MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIN MEDICAL INTERNATIONAL has no effect on the direction of Electromed i.e., Electromed and JIN MEDICAL go up and down completely randomly.

Pair Corralation between Electromed and JIN MEDICAL

Given the investment horizon of 90 days Electromed is expected to under-perform the JIN MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, Electromed is 2.5 times less risky than JIN MEDICAL. The stock trades about -0.1 of its potential returns per unit of risk. The JIN MEDICAL INTERNATIONAL is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  88.00  in JIN MEDICAL INTERNATIONAL on December 29, 2024 and sell it today you would lose (17.00) from holding JIN MEDICAL INTERNATIONAL or give up 19.32% of portfolio value over 90 days.

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

Electromed  vs.  JIN MEDICAL INTERNATIONAL

Electromed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electromed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

JIN MEDICAL INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days JIN MEDICAL INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, JIN MEDICAL is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Electromed and JIN MEDICAL

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

The idea behind Electromed and JIN MEDICAL INTERNATIONAL 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.