Correlation Between Aethlon Medical and TOLEDO

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

By analyzing existing cross correlation between Aethlon Medical and TOLEDO HOSP 5325, you can compare the effects of market volatilities on Aethlon Medical and TOLEDO 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 TOLEDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aethlon Medical and TOLEDO.

Diversification Opportunities for Aethlon Medical and TOLEDO

-0.29

Correlation Coefficient

Aethlon Medical  TOLEDO

Very good diversification

The 3 months correlation between Aethlon and TOLEDO is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aethlon Medical and TOLEDO HOSP 5325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOLEDO HOSP 5325 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 TOLEDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOLEDO HOSP 5325 has no effect on the direction of Aethlon Medical i.e., Aethlon Medical and TOLEDO go up and down completely randomly.

Pair Corralation between Aethlon Medical and TOLEDO

Given the investment horizon of 90 days Aethlon Medical is expected to under-perform the TOLEDO. In addition to that, Aethlon Medical is 1.8 times more volatile than TOLEDO HOSP 5325. It trades about -0.03 of its total potential returns per unit of risk. TOLEDO HOSP 5325 is currently generating about -0.03 per unit of volatility. If you would invest  9,707  in TOLEDO HOSP 5325 on December 24, 2024 and sell it today you would lose (943.00) from holding TOLEDO HOSP 5325 or give up 9.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.33%
Values	Daily Returns

Aethlon Medical  vs.  TOLEDO HOSP 5325

Aethlon Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aethlon Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

TOLEDO HOSP 5325

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOLEDO HOSP 5325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for TOLEDO HOSP 5325 investors.

Pair Trading with Aethlon Medical and TOLEDO

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

The idea behind Aethlon Medical and TOLEDO HOSP 5325 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.