Correlation Between Venus Concept and Electrocore LLC

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

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

Diversification Opportunities for Venus Concept and Electrocore LLC

0.56

Correlation Coefficient

Venus Concept  Electrocore LLC

Very weak diversification

The 3 months correlation between Venus and Electrocore is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Venus Concept and Electrocore LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrocore LLC and Venus Concept 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 Venus Concept are associated (or correlated) with Electrocore LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrocore LLC has no effect on the direction of Venus Concept i.e., Venus Concept and Electrocore LLC go up and down completely randomly.

Pair Corralation between Venus Concept and Electrocore LLC

Given the investment horizon of 90 days Venus Concept is expected to generate 2.59 times more return on investment than Electrocore LLC. However, Venus Concept is 2.59 times more volatile than Electrocore LLC. It trades about 0.01 of its potential returns per unit of risk. Electrocore LLC is currently generating about -0.28 per unit of risk. If you would invest  396.00  in Venus Concept on December 30, 2024 and sell it today you would lose (121.00) from holding Venus Concept or give up 30.56% of portfolio value over 90 days.

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

Venus Concept  vs.  Electrocore LLC

Venus Concept

Risk-Adjusted Performance

Very Weak

Over the last 90 days Venus Concept has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Venus Concept may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Venus Concept and Electrocore LLC

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

The idea behind Venus Concept and Electrocore LLC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.