Correlation Between Electromedical Technologies and REMSleep Holdings

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

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

Diversification Opportunities for Electromedical Technologies and REMSleep Holdings

-0.22

Correlation Coefficient

Electromedical Technologies  REMSleep Holdings

Very good diversification

The 3 months correlation between Electromedical and REMSleep is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Electromedical Technologies and REMSleep Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMSleep Holdings and Electromedical Technologies 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 Electromedical Technologies are associated (or correlated) with REMSleep Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMSleep Holdings has no effect on the direction of Electromedical Technologies i.e., Electromedical Technologies and REMSleep Holdings go up and down completely randomly.

Pair Corralation between Electromedical Technologies and REMSleep Holdings

Given the investment horizon of 90 days Electromedical Technologies is expected to generate 19.02 times more return on investment than REMSleep Holdings. However, Electromedical Technologies is 19.02 times more volatile than REMSleep Holdings. It trades about 0.16 of its potential returns per unit of risk. REMSleep Holdings is currently generating about -0.01 per unit of risk. If you would invest  0.02  in Electromedical Technologies on May 4, 2025 and sell it today you would lose (0.01) from holding Electromedical Technologies or give up 50.0% of portfolio value over 90 days.

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

Electromedical Technologies  vs.  REMSleep Holdings

Electromedical Technologies

Risk-Adjusted Performance

Good

Over the last 90 days Electromedical Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical and fundamental indicators, Electromedical Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

REMSleep Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days REMSleep Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, REMSleep Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Electromedical Technologies and REMSleep Holdings

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

The idea behind Electromedical Technologies and REMSleep Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.