Correlation Between Affluent Medical and Poxel SA

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

Diversification Opportunities for Affluent Medical and Poxel SA

0.76

Correlation Coefficient

Affluent Medical  Poxel SA

Poor diversification

The 3 months correlation between Affluent and Poxel is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Affluent Medical SAS and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel 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 Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of Affluent Medical i.e., Affluent Medical and Poxel SA go up and down completely randomly.

Pair Corralation between Affluent Medical and Poxel SA

Assuming the 90 days trading horizon Affluent Medical is expected to generate 5.25 times less return on investment than Poxel SA. But when comparing it to its historical volatility, Affluent Medical SAS is 2.11 times less risky than Poxel SA. It trades about 0.08 of its potential returns per unit of risk. Poxel SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  15.00  in Poxel SA on October 10, 2024 and sell it today you would earn a total of  5.00  from holding Poxel SA or generate 33.33% return on investment over 90 days.

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

Affluent Medical SAS  vs.  Poxel SA

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.

Poxel SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poxel SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Affluent Medical and Poxel SA

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

The idea behind Affluent Medical SAS and Poxel 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.