Correlation Between LivaNova PLC and Electromed

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

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

Diversification Opportunities for LivaNova PLC and Electromed

-0.16

Correlation Coefficient

LivaNova PLC  Electromed

Good diversification

The 3 months correlation between LivaNova and Electromed is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LivaNova PLC and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed and LivaNova PLC 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 LivaNova PLC 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 LivaNova PLC i.e., LivaNova PLC and Electromed go up and down completely randomly.

Pair Corralation between LivaNova PLC and Electromed

Given the investment horizon of 90 days LivaNova PLC is expected to generate 0.57 times more return on investment than Electromed. However, LivaNova PLC is 1.75 times less risky than Electromed. It trades about -0.01 of its potential returns per unit of risk. Electromed is currently generating about -0.06 per unit of risk. If you would invest  4,350  in LivaNova PLC on May 7, 2025 and sell it today you would lose (89.00) from holding LivaNova PLC or give up 2.05% of portfolio value over 90 days.

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

LivaNova PLC  vs.  Electromed

LivaNova PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days LivaNova PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, LivaNova PLC is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Electromed

Risk-Adjusted Performance

Weakest

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 LivaNova PLC and Electromed

The main advantage of trading using opposite LivaNova PLC and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LivaNova PLC 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 LivaNova PLC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .