Correlation Between Repro Med and Nephros

Can any of the company-specific risk be diversified away by investing in both Repro Med and Nephros 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 Nephros 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 Nephros, you can compare the effects of market volatilities on Repro Med and Nephros 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 Nephros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repro Med and Nephros.

Diversification Opportunities for Repro Med and Nephros

0.05

Correlation Coefficient

Repro Med  Nephros

Significant diversification

The 3 months correlation between Repro and Nephros is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Repro Med Systems and Nephros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nephros 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 Nephros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nephros has no effect on the direction of Repro Med i.e., Repro Med and Nephros go up and down completely randomly.

Pair Corralation between Repro Med and Nephros

Given the investment horizon of 90 days Repro Med Systems is expected to under-perform the Nephros. In addition to that, Repro Med is 1.05 times more volatile than Nephros. It trades about -0.15 of its total potential returns per unit of risk. Nephros is currently generating about 0.07 per unit of volatility. If you would invest  148.00  in Nephros on December 30, 2024 and sell it today you would earn a total of  19.00  from holding Nephros or generate 12.84% return on investment over 90 days.

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

Repro Med Systems  vs.  Nephros

Repro Med Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repro Med Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Nephros

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nephros are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Nephros demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Repro Med and Nephros

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

The idea behind Repro Med Systems and Nephros 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.