Correlation Between Aesthetic Medical and Aveanna Healthcare

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

Diversification Opportunities for Aesthetic Medical and Aveanna Healthcare

0.5

Correlation Coefficient

Aesthetic Medical  Aveanna Healthcare

Very weak diversification

The 3 months correlation between Aesthetic and Aveanna is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aesthetic Medical Intl and Aveanna Healthcare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveanna Healthcare 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 Aveanna Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveanna Healthcare has no effect on the direction of Aesthetic Medical i.e., Aesthetic Medical and Aveanna Healthcare go up and down completely randomly.

Pair Corralation between Aesthetic Medical and Aveanna Healthcare

If you would invest  32.00  in Aesthetic Medical Intl on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Aesthetic Medical Intl or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.33%
Values	Daily Returns

Aesthetic Medical Intl  vs.  Aveanna Healthcare Holdings

Aesthetic Medical Intl

Risk-Adjusted Performance

0 of 100

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.

Aveanna Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aveanna Healthcare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Aesthetic Medical and Aveanna Healthcare

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

The idea behind Aesthetic Medical Intl and Aveanna Healthcare Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.