Correlation Between Catheter Precision and Semler Scientific

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

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

Diversification Opportunities for Catheter Precision and Semler Scientific

-0.37

Correlation Coefficient

Catheter Precision  Semler Scientific

Very good diversification

The 3 months correlation between Catheter and Semler is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Catheter Precision and Semler Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semler Scientific and Catheter Precision 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 Catheter Precision 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 Catheter Precision i.e., Catheter Precision and Semler Scientific go up and down completely randomly.

Pair Corralation between Catheter Precision and Semler Scientific

Given the investment horizon of 90 days Catheter Precision is expected to under-perform the Semler Scientific. In addition to that, Catheter Precision is 1.65 times more volatile than Semler Scientific. It trades about -0.08 of its total potential returns per unit of risk. Semler Scientific is currently generating about 0.05 per unit of volatility. If you would invest  3,166  in Semler Scientific on September 22, 2024 and sell it today you would earn a total of  3,012  from holding Semler Scientific or generate 95.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Catheter Precision  vs.  Semler Scientific

Catheter Precision

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catheter Precision are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Catheter Precision disclosed 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 Catheter Precision and Semler Scientific

The main advantage of trading using opposite Catheter Precision and Semler Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catheter Precision 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 Catheter Precision 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 Transaction History module to view history of all your transactions and understand their impact on performance.