Correlation Between Semler Scientific and AltaGas

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

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

Diversification Opportunities for Semler Scientific and AltaGas

-0.61

Correlation Coefficient

Semler Scientific  AltaGas

Excellent diversification

The 3 months correlation between Semler and AltaGas is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Semler Scientific and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Semler Scientific 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 Semler Scientific are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Semler Scientific i.e., Semler Scientific and AltaGas go up and down completely randomly.

Pair Corralation between Semler Scientific and AltaGas

Given the investment horizon of 90 days Semler Scientific is expected to generate 8.95 times more return on investment than AltaGas. However, Semler Scientific is 8.95 times more volatile than AltaGas. It trades about 0.25 of its potential returns per unit of risk. AltaGas is currently generating about -0.08 per unit of risk. If you would invest  2,957  in Semler Scientific on September 27, 2024 and sell it today you would earn a total of  4,171  from holding Semler Scientific or generate 141.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Semler Scientific  vs.  AltaGas

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 weak essential indicators, Semler Scientific reported solid returns over the last few months and may actually be approaching a breakup point.

AltaGas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AltaGas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, AltaGas is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Semler Scientific and AltaGas

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

The idea behind Semler Scientific and AltaGas 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.