Correlation Between Affluent Medical and SA Catana

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

Diversification Opportunities for Affluent Medical and SA Catana

-0.02

Correlation Coefficient

Affluent Medical  SA Catana

Good diversification

The 3 months correlation between Affluent and CATG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and SA Catana Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SA Catana Group 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 SA Catana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SA Catana Group has no effect on the direction of Affluent Medical i.e., Affluent Medical and SA Catana go up and down completely randomly.

Pair Corralation between Affluent Medical and SA Catana

Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 0.95 times more return on investment than SA Catana. However, Affluent Medical SAS is 1.06 times less risky than SA Catana. It trades about 0.04 of its potential returns per unit of risk. SA Catana Group is currently generating about -0.03 per unit of risk. If you would invest  134.00  in Affluent Medical SAS on December 30, 2024 and sell it today you would earn a total of  5.00  from holding Affluent Medical SAS or generate 3.73% return on investment over 90 days.

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

Affluent Medical SAS  vs.  SA Catana Group

Affluent Medical SAS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Affluent Medical SAS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Affluent Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SA Catana Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days SA Catana Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SA Catana is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Affluent Medical and SA Catana

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

The idea behind Affluent Medical SAS and SA Catana Group 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.