Correlation Between Aethlon Medical and TARGET

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

By analyzing existing cross correlation between Aethlon Medical and TARGET P 7, you can compare the effects of market volatilities on Aethlon Medical and TARGET 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 Aethlon Medical with a short position of TARGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aethlon Medical and TARGET.

Diversification Opportunities for Aethlon Medical and TARGET

-0.43

Correlation Coefficient

Aethlon Medical  TARGET

Very good diversification

The 3 months correlation between Aethlon and TARGET is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aethlon Medical and TARGET P 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TARGET P 7 and Aethlon Medical 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 Aethlon Medical are associated (or correlated) with TARGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TARGET P 7 has no effect on the direction of Aethlon Medical i.e., Aethlon Medical and TARGET go up and down completely randomly.

Pair Corralation between Aethlon Medical and TARGET

Given the investment horizon of 90 days Aethlon Medical is expected to under-perform the TARGET. In addition to that, Aethlon Medical is 4.09 times more volatile than TARGET P 7. It trades about -0.01 of its total potential returns per unit of risk. TARGET P 7 is currently generating about 0.02 per unit of volatility. If you would invest  11,809  in TARGET P 7 on October 9, 2024 and sell it today you would earn a total of  535.00  from holding TARGET P 7 or generate 4.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	38.51%
Values	Daily Returns

Aethlon Medical  vs.  TARGET P 7

Aethlon Medical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aethlon Medical are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Aethlon Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

TARGET P 7

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TARGET P 7 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, TARGET sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aethlon Medical and TARGET

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

The idea behind Aethlon Medical and TARGET P 7 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.