Correlation Between Adapthealth Corp and Aesthetic Medical

Can any of the company-specific risk be diversified away by investing in both Adapthealth Corp and Aesthetic Medical 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 Adapthealth Corp and Aesthetic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adapthealth Corp and Aesthetic Medical Intl, you can compare the effects of market volatilities on Adapthealth Corp and Aesthetic Medical 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 Adapthealth Corp with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adapthealth Corp and Aesthetic Medical.

Diversification Opportunities for Adapthealth Corp and Aesthetic Medical

0.0

Correlation Coefficient

Adapthealth Corp  Aesthetic Medical

Pay attention - limited upside

The 3 months correlation between Adapthealth and Aesthetic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Adapthealth Corp and Aesthetic Medical Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesthetic Medical Intl and Adapthealth Corp 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 Adapthealth Corp are associated (or correlated) with Aesthetic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesthetic Medical Intl has no effect on the direction of Adapthealth Corp i.e., Adapthealth Corp and Aesthetic Medical go up and down completely randomly.

Pair Corralation between Adapthealth Corp and Aesthetic Medical

If you would invest  1,003  in Adapthealth Corp on November 28, 2024 and sell it today you would earn a total of  61.00  from holding Adapthealth Corp or generate 6.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Adapthealth Corp  vs.  Aesthetic Medical Intl

Adapthealth Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Adapthealth Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Adapthealth Corp may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Aesthetic Medical Intl

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aesthetic Medical Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Aesthetic Medical is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Adapthealth Corp and Aesthetic Medical

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

The idea behind Adapthealth Corp and Aesthetic Medical Intl 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.