Correlation Between Affluent Medical and NFL Biosciences

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

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

Diversification Opportunities for Affluent Medical and NFL Biosciences

0.68

Correlation Coefficient

Affluent Medical  NFL Biosciences

Poor diversification

The 3 months correlation between Affluent and NFL is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and NFL Biosciences SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFL Biosciences SAS and Affluent 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 Affluent Medical SAS are associated (or correlated) with NFL Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFL Biosciences SAS has no effect on the direction of Affluent Medical i.e., Affluent Medical and NFL Biosciences go up and down completely randomly.

Pair Corralation between Affluent Medical and NFL Biosciences

Assuming the 90 days trading horizon Affluent Medical is expected to generate 2.17 times less return on investment than NFL Biosciences. But when comparing it to its historical volatility, Affluent Medical SAS is 1.16 times less risky than NFL Biosciences. It trades about 0.01 of its potential returns per unit of risk. NFL Biosciences SAS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  201.00  in NFL Biosciences SAS on September 30, 2024 and sell it today you would lose (16.00) from holding NFL Biosciences SAS or give up 7.96% of portfolio value over 90 days.

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

Affluent Medical SAS  vs.  NFL Biosciences SAS

Affluent Medical SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affluent Medical SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

NFL Biosciences SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NFL Biosciences SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Affluent Medical and NFL Biosciences

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

The idea behind Affluent Medical SAS and NFL Biosciences SAS 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.