Correlation Between Inogen and Semler Scientific

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

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

Diversification Opportunities for Inogen and Semler Scientific

-0.05

Correlation Coefficient

Inogen  Semler Scientific

Good diversification

The 3 months correlation between Inogen and Semler is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Semler Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semler Scientific and Inogen 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 Inogen Inc 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 Inogen i.e., Inogen and Semler Scientific go up and down completely randomly.

Pair Corralation between Inogen and Semler Scientific

Given the investment horizon of 90 days Inogen is expected to generate 1.43 times less return on investment than Semler Scientific. But when comparing it to its historical volatility, Inogen Inc is 1.12 times less risky than Semler Scientific. It trades about 0.06 of its potential returns per unit of risk. Semler Scientific is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,943  in Semler Scientific on October 1, 2024 and sell it today you would earn a total of  3,384  from holding Semler Scientific or generate 114.98% return on investment over 90 days.

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

Inogen Inc  vs.  Semler Scientific

Inogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Semler Scientific

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semler Scientific are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent essential indicators, Semler Scientific reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inogen and Semler Scientific

The main advantage of trading using opposite Inogen and Semler Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen 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 Inogen Inc 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.