Correlation Between Electromedical Technologies and InspireMD
Can any of the company-specific risk be diversified away by investing in both Electromedical Technologies and InspireMD 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 Electromedical Technologies and InspireMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electromedical Technologies and InspireMD, you can compare the effects of market volatilities on Electromedical Technologies and InspireMD 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 Electromedical Technologies with a short position of InspireMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromedical Technologies and InspireMD.
Diversification Opportunities for Electromedical Technologies and InspireMD
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electromedical and InspireMD is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Electromedical Technologies and InspireMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InspireMD and Electromedical Technologies 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 Electromedical Technologies are associated (or correlated) with InspireMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InspireMD has no effect on the direction of Electromedical Technologies i.e., Electromedical Technologies and InspireMD go up and down completely randomly.
Pair Corralation between Electromedical Technologies and InspireMD
Given the investment horizon of 90 days Electromedical Technologies is expected to generate 1.0 times less return on investment than InspireMD. In addition to that, Electromedical Technologies is 2.69 times more volatile than InspireMD. It trades about 0.03 of its total potential returns per unit of risk. InspireMD is currently generating about 0.07 per unit of volatility. If you would invest 92.00 in InspireMD on September 23, 2024 and sell it today you would earn a total of 208.00 from holding InspireMD or generate 226.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Electromedical Technologies vs. InspireMD
Performance |
Timeline |
Electromedical Technologies |
InspireMD |
Electromedical Technologies and InspireMD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Electromedical Technologies and InspireMD
The main advantage of trading using opposite Electromedical Technologies and InspireMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electromedical Technologies position performs unexpectedly, InspireMD 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 InspireMD will offset losses from the drop in InspireMD's long position.Electromedical Technologies vs. Armm Inc | Electromedical Technologies vs. Cellink AB | Electromedical Technologies vs. Bone Biologics Corp | Electromedical Technologies vs. BICO Group AB |
InspireMD vs. Bone Biologics Corp | InspireMD vs. Tivic Health Systems | InspireMD vs. Bluejay Diagnostics | InspireMD vs. Vivos Therapeutics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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