Correlation Between Semler Scientific and Atmofizer Technologies

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Can any of the company-specific risk be diversified away by investing in both Semler Scientific and Atmofizer Technologies 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 Semler Scientific and Atmofizer Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semler Scientific and Atmofizer Technologies, you can compare the effects of market volatilities on Semler Scientific and Atmofizer Technologies 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 Semler Scientific with a short position of Atmofizer Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semler Scientific and Atmofizer Technologies.

Diversification Opportunities for Semler Scientific and Atmofizer Technologies

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Semler and Atmofizer is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Semler Scientific and Atmofizer Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atmofizer Technologies and Semler Scientific 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 Semler Scientific are associated (or correlated) with Atmofizer Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atmofizer Technologies has no effect on the direction of Semler Scientific i.e., Semler Scientific and Atmofizer Technologies go up and down completely randomly.

Pair Corralation between Semler Scientific and Atmofizer Technologies

Given the investment horizon of 90 days Semler Scientific is expected to under-perform the Atmofizer Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Semler Scientific is 3.44 times less risky than Atmofizer Technologies. The stock trades about -0.17 of its potential returns per unit of risk. The Atmofizer Technologies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  2.30  in Atmofizer Technologies on October 17, 2024 and sell it today you would earn a total of  3.15  from holding Atmofizer Technologies or generate 136.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Semler Scientific  vs.  Atmofizer Technologies

 Performance 
       Timeline  
Semler Scientific 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Semler Scientific are ranked lower than 14 (%) 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.
Atmofizer Technologies 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Atmofizer Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Atmofizer Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Semler Scientific and Atmofizer Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Semler Scientific and Atmofizer Technologies

The main advantage of trading using opposite Semler Scientific and Atmofizer Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semler Scientific position performs unexpectedly, Atmofizer Technologies 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 Atmofizer Technologies will offset losses from the drop in Atmofizer Technologies' long position.
The idea behind Semler Scientific and Atmofizer Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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