Correlation Between Electrocore LLC and Phreesia

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

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

Diversification Opportunities for Electrocore LLC and Phreesia

-0.46

Correlation Coefficient

Electrocore LLC  Phreesia

Very good diversification

The 3 months correlation between Electrocore and Phreesia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Phreesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phreesia and Electrocore LLC 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 Electrocore LLC are associated (or correlated) with Phreesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phreesia has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Phreesia go up and down completely randomly.

Pair Corralation between Electrocore LLC and Phreesia

Given the investment horizon of 90 days Electrocore LLC is expected to generate 1.32 times more return on investment than Phreesia. However, Electrocore LLC is 1.32 times more volatile than Phreesia. It trades about 0.07 of its potential returns per unit of risk. Phreesia is currently generating about 0.0 per unit of risk. If you would invest  460.00  in Electrocore LLC on September 13, 2024 and sell it today you would earn a total of  880.00  from holding Electrocore LLC or generate 191.3% return on investment over 90 days.

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

Electrocore LLC  vs.  Phreesia

Electrocore LLC

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Electrocore LLC are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Electrocore LLC reported solid returns over the last few months and may actually be approaching a breakup point.

Phreesia

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phreesia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Phreesia is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Electrocore LLC and Phreesia

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

The idea behind Electrocore LLC and Phreesia 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.