Correlation Between Repro Med and ATRION

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

Diversification Opportunities for Repro Med and ATRION

0.27

Correlation Coefficient

Repro Med  ATRION

Modest diversification

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

Pair Corralation between Repro Med and ATRION

Given the investment horizon of 90 days Repro Med Systems is expected to generate 0.59 times more return on investment than ATRION. However, Repro Med Systems is 1.69 times less risky than ATRION. It trades about 0.03 of its potential returns per unit of risk. ATRION is currently generating about -0.04 per unit of risk. 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

Repro Med Systems  vs.  ATRION

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.

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.

Pair Trading with Repro Med and ATRION

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

The idea behind Repro Med Systems and ATRION 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.