Correlation Between Affluent Medical and Netmedia Group

Can any of the company-specific risk be diversified away by investing in both Affluent Medical and Netmedia Group 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 Netmedia Group 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 Netmedia Group SA, you can compare the effects of market volatilities on Affluent Medical and Netmedia Group 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 Netmedia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affluent Medical and Netmedia Group.

Diversification Opportunities for Affluent Medical and Netmedia Group

0.16

Correlation Coefficient

Affluent Medical  Netmedia Group

Average diversification

The 3 months correlation between Affluent and Netmedia is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Netmedia Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmedia Group SA 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 Netmedia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmedia Group SA has no effect on the direction of Affluent Medical i.e., Affluent Medical and Netmedia Group go up and down completely randomly.

Pair Corralation between Affluent Medical and Netmedia Group

Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 0.64 times more return on investment than Netmedia Group. However, Affluent Medical SAS is 1.57 times less risky than Netmedia Group. It trades about 0.1 of its potential returns per unit of risk. Netmedia Group SA is currently generating about -0.02 per unit of risk. If you would invest  120.00  in Affluent Medical SAS on December 3, 2024 and sell it today you would earn a total of  21.00  from holding Affluent Medical SAS or generate 17.5% return on investment over 90 days.

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

Affluent Medical SAS  vs.  Netmedia Group SA

Affluent Medical SAS

Risk-Adjusted Performance

OK

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

Netmedia Group SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Netmedia Group SA 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 Netmedia Group

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

The idea behind Affluent Medical SAS and Netmedia Group SA 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.