Correlation Between Electrocore LLC and Milestone Scientific

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

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

Diversification Opportunities for Electrocore LLC and Milestone Scientific

-0.87

Correlation Coefficient

Electrocore LLC  Milestone Scientific

Pay attention - limited upside

The 3 months correlation between Electrocore and Milestone is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Electrocore LLC and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific 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 Milestone Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Scientific has no effect on the direction of Electrocore LLC i.e., Electrocore LLC and Milestone Scientific go up and down completely randomly.

Pair Corralation between Electrocore LLC and Milestone Scientific

Given the investment horizon of 90 days Electrocore LLC is expected to generate 0.97 times more return on investment than Milestone Scientific. However, Electrocore LLC is 1.03 times less risky than Milestone Scientific. It trades about 0.06 of its potential returns per unit of risk. Milestone Scientific is currently generating about 0.03 per unit of risk. If you would invest  525.00  in Electrocore LLC on August 10, 2024 and sell it today you would earn a total of  748.00  from holding Electrocore LLC or generate 142.48% return on investment over 90 days.

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

Electrocore LLC  vs.  Milestone Scientific

Electrocore LLC

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Electrocore LLC are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Electrocore LLC reported solid returns over the last few months and may actually be approaching a breakup point.

Milestone Scientific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Milestone Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Electrocore LLC and Milestone Scientific

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

The idea behind Electrocore LLC and Milestone Scientific 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.