Correlation Between Escalon Medical and EDAP TMS
Can any of the company-specific risk be diversified away by investing in both Escalon Medical and EDAP TMS 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 Escalon Medical and EDAP TMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalon Medical Corp and EDAP TMS SA, you can compare the effects of market volatilities on Escalon Medical and EDAP TMS 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 Escalon Medical with a short position of EDAP TMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalon Medical and EDAP TMS.
Diversification Opportunities for Escalon Medical and EDAP TMS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Escalon and EDAP is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Escalon Medical Corp and EDAP TMS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDAP TMS SA and Escalon Medical 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 Escalon Medical Corp are associated (or correlated) with EDAP TMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDAP TMS SA has no effect on the direction of Escalon Medical i.e., Escalon Medical and EDAP TMS go up and down completely randomly.
Pair Corralation between Escalon Medical and EDAP TMS
If you would invest 6.00 in Escalon Medical Corp on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Escalon Medical Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Escalon Medical Corp vs. EDAP TMS SA
Performance |
| Timeline |
| Escalon Medical Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EDAP TMS SA |
Escalon Medical and EDAP TMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalon Medical and EDAP TMS
The main advantage of trading using opposite Escalon Medical and EDAP TMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalon Medical position performs unexpectedly, EDAP TMS 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 EDAP TMS will offset losses from the drop in EDAP TMS's long position.| Escalon Medical vs. HireRight Holdings Corp | Escalon Medical vs. Dynatronics | Escalon Medical vs. IRIDEX | Escalon Medical vs. Lifeway Foods |
| EDAP TMS vs. Henry Schein | EDAP TMS vs. Owens Minor | EDAP TMS vs. Cardinal Health | EDAP TMS vs. Patterson Companies |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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