Correlation Between Aesthetic Medical and Advanced Health

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

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

Diversification Opportunities for Aesthetic Medical and Advanced Health

0.0

Correlation Coefficient

Aesthetic Medical  Advanced Health

Pay attention - limited upside

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

Pair Corralation between Aesthetic Medical and Advanced Health

Considering the 90-day investment horizon Aesthetic Medical is expected to generate 16.04 times less return on investment than Advanced Health. But when comparing it to its historical volatility, Aesthetic Medical Intl is 4.42 times less risky than Advanced Health. It trades about 0.02 of its potential returns per unit of risk. Advanced Health Intelligence is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  192.00  in Advanced Health Intelligence on October 4, 2024 and sell it today you would earn a total of  206.00  from holding Advanced Health Intelligence or generate 107.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	34.46%
Values	Daily Returns

Aesthetic Medical Intl  vs.  Advanced Health Intelligence

Aesthetic Medical Intl

Risk-Adjusted Performance

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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.

Advanced Health Inte

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aesthetic Medical and Advanced Health

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

The idea behind Aesthetic Medical Intl and Advanced Health Intelligence 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.