Correlation Between Color Star and Aesthetic Medical

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

By analyzing existing cross correlation between Color Star Technology and Aesthetic Medical Intl, you can compare the effects of market volatilities on Color Star and Aesthetic 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 Color Star with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and Aesthetic Medical.

Diversification Opportunities for Color Star and Aesthetic Medical

0.0

Correlation Coefficient

Color Star  Aesthetic Medical

Pay attention - limited upside

The 3 months correlation between Color and Aesthetic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and Aesthetic Medical Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesthetic Medical Intl and Color Star 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 Color Star Technology are associated (or correlated) with Aesthetic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesthetic Medical Intl has no effect on the direction of Color Star i.e., Color Star and Aesthetic Medical go up and down completely randomly.

Pair Corralation between Color Star and Aesthetic Medical

If you would invest  32.00  in Aesthetic Medical Intl on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Aesthetic Medical Intl or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Color Star Technology  vs.  Aesthetic Medical Intl

Color Star Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Aesthetic Medical Intl

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Color Star and Aesthetic Medical

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

The idea behind Color Star Technology and Aesthetic Medical Intl 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.