Correlation Between Affluent Medical and Socit Htelire

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

Diversification Opportunities for Affluent Medical and Socit Htelire

0.82

Correlation Coefficient

Affluent Medical  Socit Htelire

Very poor diversification

The 3 months correlation between Affluent and Socit is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Socit Htelire et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Htelire et 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 Socit Htelire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Htelire et has no effect on the direction of Affluent Medical i.e., Affluent Medical and Socit Htelire go up and down completely randomly.

Pair Corralation between Affluent Medical and Socit Htelire

Assuming the 90 days trading horizon Affluent Medical SAS is expected to generate 1.85 times more return on investment than Socit Htelire. However, Affluent Medical is 1.85 times more volatile than Socit Htelire et. It trades about 0.02 of its potential returns per unit of risk. Socit Htelire et is currently generating about 0.01 per unit of risk. If you would invest  168.00  in Affluent Medical SAS on October 9, 2024 and sell it today you would lose (20.00) from holding Affluent Medical SAS or give up 11.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.41%
Values	Daily Returns

Affluent Medical SAS  vs.  Socit Htelire et

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Socit Htelire et

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Socit Htelire et has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Socit Htelire is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Affluent Medical and Socit Htelire

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

The idea behind Affluent Medical SAS and Socit Htelire et 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.