Correlation Between Profile Systems and Athens Medical

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

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

Diversification Opportunities for Profile Systems and Athens Medical

-0.31

Correlation Coefficient

Profile Systems  Athens Medical

Very good diversification

The 3 months correlation between Profile and Athens is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Profile Systems Software and Athens Medical CSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Medical CSA and Profile Systems 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 Profile Systems Software are associated (or correlated) with Athens Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Medical CSA has no effect on the direction of Profile Systems i.e., Profile Systems and Athens Medical go up and down completely randomly.

Pair Corralation between Profile Systems and Athens Medical

Assuming the 90 days trading horizon Profile Systems Software is expected to generate 1.01 times more return on investment than Athens Medical. However, Profile Systems is 1.01 times more volatile than Athens Medical CSA. It trades about 0.09 of its potential returns per unit of risk. Athens Medical CSA is currently generating about -0.03 per unit of risk. If you would invest  475.00  in Profile Systems Software on September 2, 2024 and sell it today you would earn a total of  40.00  from holding Profile Systems Software or generate 8.42% return on investment over 90 days.

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

Profile Systems Software  vs.  Athens Medical CSA

Profile Systems Software

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Profile Systems Software are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Profile Systems may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Athens Medical CSA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athens Medical CSA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Athens Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Profile Systems and Athens Medical

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

The idea behind Profile Systems Software and Athens Medical CSA 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.