Correlation Between PAVmed Series and Electromed

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

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

Diversification Opportunities for PAVmed Series and Electromed

0.64

Correlation Coefficient

PAVmed Series  Electromed

Poor diversification

The 3 months correlation between PAVmed and Electromed is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PAVmed Series Z and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and PAVmed Series 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 PAVmed Series Z 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 PAVmed Series i.e., PAVmed Series and Electromed go up and down completely randomly.

Pair Corralation between PAVmed Series and Electromed

Assuming the 90 days horizon PAVmed Series Z is expected to generate 9.32 times more return on investment than Electromed. However, PAVmed Series is 9.32 times more volatile than Electromed. It trades about 0.11 of its potential returns per unit of risk. Electromed is currently generating about -0.1 per unit of risk. If you would invest  0.99  in PAVmed Series Z on December 29, 2024 and sell it today you would lose (0.34) from holding PAVmed Series Z or give up 34.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.44%
Values	Daily Returns

PAVmed Series Z  vs.  Electromed

PAVmed Series Z

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PAVmed Series Z are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, PAVmed Series showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with PAVmed Series and Electromed

The main advantage of trading using opposite PAVmed Series and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAVmed Series 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 PAVmed Series Z 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.