Correlation Between Integer Holdings and Electromed

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

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

Diversification Opportunities for Integer Holdings and Electromed

0.66

Correlation Coefficient

Integer Holdings  Electromed

Poor diversification

The 3 months correlation between Integer and Electromed is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Integer Holdings Corp and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and Integer Holdings 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 Integer Holdings Corp 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 Integer Holdings i.e., Integer Holdings and Electromed go up and down completely randomly.

Pair Corralation between Integer Holdings and Electromed

Given the investment horizon of 90 days Integer Holdings Corp is expected to under-perform the Electromed. But the stock apears to be less risky and, when comparing its historical volatility, Integer Holdings Corp is 1.03 times less risky than Electromed. The stock trades about -0.01 of its potential returns per unit of risk. The Electromed is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,622  in Electromed on January 31, 2024 and sell it today you would earn a total of  18.00  from holding Electromed or generate 1.11% return on investment over 90 days.

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

Integer Holdings Corp  vs.  Electromed

Integer Holdings Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integer Holdings Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Integer Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Electromed

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Electromed are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain primary indicators, Electromed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integer Holdings and Electromed

The main advantage of trading using opposite Integer Holdings and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integer Holdings 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 Integer Holdings Corp 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.