Correlation Between Doximity and Semler Scientific

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

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

Diversification Opportunities for Doximity and Semler Scientific

0.75

Correlation Coefficient

Doximity  Semler Scientific

Poor diversification

The 3 months correlation between Doximity and Semler is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Doximity and Semler Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semler Scientific and Doximity 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 Doximity are associated (or correlated) with Semler Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semler Scientific has no effect on the direction of Doximity i.e., Doximity and Semler Scientific go up and down completely randomly.

Pair Corralation between Doximity and Semler Scientific

Given the investment horizon of 90 days Doximity is expected to generate 0.77 times more return on investment than Semler Scientific. However, Doximity is 1.29 times less risky than Semler Scientific. It trades about 0.14 of its potential returns per unit of risk. Semler Scientific is currently generating about 0.1 per unit of risk. If you would invest  2,754  in Doximity on September 22, 2024 and sell it today you would earn a total of  3,029  from holding Doximity or generate 109.99% return on investment over 90 days.

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

Doximity  vs.  Semler Scientific

Doximity

Risk-Adjusted Performance

9 of 100

OK

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

Semler Scientific

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semler Scientific are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Semler Scientific reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Doximity and Semler Scientific

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

The idea behind Doximity and Semler 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.