Correlation Between Affluent Medical and Exail Technologies

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

Diversification Opportunities for Affluent Medical and Exail Technologies

0.24

Correlation Coefficient

Affluent Medical  Exail Technologies

Modest diversification

The 3 months correlation between Affluent and Exail is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Exail Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exail Technologies 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 Exail Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exail Technologies has no effect on the direction of Affluent Medical i.e., Affluent Medical and Exail Technologies go up and down completely randomly.

Pair Corralation between Affluent Medical and Exail Technologies

Assuming the 90 days trading horizon Affluent Medical is expected to generate 16.71 times less return on investment than Exail Technologies. But when comparing it to its historical volatility, Affluent Medical SAS is 1.76 times less risky than Exail Technologies. It trades about 0.04 of its potential returns per unit of risk. Exail Technologies SA is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  1,740  in Exail Technologies SA on December 30, 2024 and sell it today you would earn a total of  2,185  from holding Exail Technologies SA or generate 125.57% return on investment over 90 days.

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

Affluent Medical SAS  vs.  Exail Technologies SA

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.

Exail Technologies

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Exail Technologies SA are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Exail Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Affluent Medical and Exail Technologies

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

The idea behind Affluent Medical SAS and Exail Technologies 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.