Correlation Between Repro Med and Milestone Scientific

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

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

Diversification Opportunities for Repro Med and Milestone Scientific

-0.31

Correlation Coefficient

Repro Med  Milestone Scientific

Very good diversification

The 3 months correlation between Repro and Milestone is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Repro Med Systems and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific and Repro Med 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 Repro Med Systems 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 Repro Med i.e., Repro Med and Milestone Scientific go up and down completely randomly.

Pair Corralation between Repro Med and Milestone Scientific

Given the investment horizon of 90 days Repro Med Systems is expected to generate 0.68 times more return on investment than Milestone Scientific. However, Repro Med Systems is 1.47 times less risky than Milestone Scientific. It trades about 0.23 of its potential returns per unit of risk. Milestone Scientific is currently generating about 0.02 per unit of risk. If you would invest  244.00  in Repro Med Systems on September 2, 2024 and sell it today you would earn a total of  154.00  from holding Repro Med Systems or generate 63.11% return on investment over 90 days.

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

Repro Med Systems  vs.  Milestone Scientific

Repro Med Systems

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Repro Med Systems are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Repro Med exhibited solid returns over the last few months and may actually be approaching a breakup point.

Milestone Scientific

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Milestone Scientific are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Milestone Scientific is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Repro Med and Milestone Scientific

The main advantage of trading using opposite Repro Med and Milestone Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repro Med 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 Repro Med Systems 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.