Correlation Between Electromed and Simulations Plus

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

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

Diversification Opportunities for Electromed and Simulations Plus

0.55

Correlation Coefficient

Electromed  Simulations Plus

Very weak diversification

The 3 months correlation between Electromed and Simulations is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Electromed and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus and Electromed 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 Electromed are associated (or correlated) with Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of Electromed i.e., Electromed and Simulations Plus go up and down completely randomly.

Pair Corralation between Electromed and Simulations Plus

Given the investment horizon of 90 days Electromed is expected to generate 1.04 times less return on investment than Simulations Plus. In addition to that, Electromed is 1.18 times more volatile than Simulations Plus. It trades about 0.12 of its total potential returns per unit of risk. Simulations Plus is currently generating about 0.15 per unit of volatility. If you would invest  1,299  in Simulations Plus on August 4, 2025 and sell it today you would earn a total of  419.00  from holding Simulations Plus or generate 32.26% return on investment over 90 days.

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

Electromed  vs.  Simulations Plus

Electromed

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Electromed are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Electromed exhibited solid returns over the last few months and may actually be approaching a breakup point.

Simulations Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simulations Plus are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent essential indicators, Simulations Plus reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electromed and Simulations Plus

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

The idea behind Electromed and Simulations Plus 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.