Correlation Between Electromedical Technologies and OpGen

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

By analyzing existing cross correlation between Electromedical Technologies and OpGen Inc, you can compare the effects of market volatilities on Electromedical Technologies and OpGen 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 OpGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electromedical Technologies and OpGen.

Diversification Opportunities for Electromedical Technologies and OpGen

0.0

Correlation Coefficient

Electromedical Technologies  OpGen

Pay attention - limited upside

The 3 months correlation between Electromedical and OpGen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electromedical Technologies and OpGen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OpGen Inc 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 OpGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OpGen Inc has no effect on the direction of Electromedical Technologies i.e., Electromedical Technologies and OpGen go up and down completely randomly.

Pair Corralation between Electromedical Technologies and OpGen

Given the investment horizon of 90 days Electromedical Technologies is expected to generate 1.18 times more return on investment than OpGen. However, Electromedical Technologies is 1.18 times more volatile than OpGen Inc. It trades about 0.02 of its potential returns per unit of risk. OpGen Inc is currently generating about -0.01 per unit of risk. If you would invest  1.00  in Electromedical Technologies on October 10, 2024 and sell it today you would lose (0.97) from holding Electromedical Technologies or give up 97.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	81.25%
Values	Daily Returns

Electromedical Technologies  vs.  OpGen Inc

Electromedical Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Electromedical Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Electromedical Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

OpGen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OpGen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, OpGen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Electromedical Technologies and OpGen

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

The idea behind Electromedical Technologies and OpGen Inc 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.