Correlation Between ATRION and Repro Med

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

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

Diversification Opportunities for ATRION and Repro Med

0.27

Correlation Coefficient

ATRION  Repro Med

Modest diversification

The 3 months correlation between ATRION and Repro is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ATRION and Repro Med Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repro Med Systems and ATRION 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 ATRION are associated (or correlated) with Repro Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repro Med Systems has no effect on the direction of ATRION i.e., ATRION and Repro Med go up and down completely randomly.

Pair Corralation between ATRION and Repro Med

Given the investment horizon of 90 days ATRION is expected to under-perform the Repro Med. In addition to that, ATRION is 1.69 times more volatile than Repro Med Systems. It trades about -0.04 of its total potential returns per unit of risk. Repro Med Systems is currently generating about 0.03 per unit of volatility. If you would invest  345.00  in Repro Med Systems on September 4, 2024 and sell it today you would earn a total of  53.00  from holding Repro Med Systems or generate 15.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.63%
Values	Daily Returns

ATRION  vs.  Repro Med Systems

ATRION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATRION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ATRION is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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.

Pair Trading with ATRION and Repro Med

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

The idea behind ATRION and Repro Med Systems 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.