Correlation Between American Shared and Electromed

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

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

Diversification Opportunities for American Shared and Electromed

0.22

Correlation Coefficient

American Shared  Electromed

Modest diversification

The 3 months correlation between American and Electromed is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and American Shared 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 American Shared Hospital 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 American Shared i.e., American Shared and Electromed go up and down completely randomly.

Pair Corralation between American Shared and Electromed

Considering the 90-day investment horizon American Shared Hospital is expected to generate 0.91 times more return on investment than Electromed. However, American Shared Hospital is 1.1 times less risky than Electromed. It trades about -0.04 of its potential returns per unit of risk. Electromed is currently generating about -0.07 per unit of risk. If you would invest  277.00  in American Shared Hospital on May 6, 2025 and sell it today you would lose (28.00) from holding American Shared Hospital or give up 10.11% of portfolio value over 90 days.

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

American Shared Hospital  vs.  Electromed

American Shared Hospital

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Shared Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with American Shared and Electromed

The main advantage of trading using opposite American Shared and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared 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 American Shared Hospital 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.