Correlation Between Aesthetic Medical and Lifestance Health

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

Diversification Opportunities for Aesthetic Medical and Lifestance Health

0.03

Correlation Coefficient

Aesthetic Medical  Lifestance Health

Significant diversification

The 3 months correlation between Aesthetic and Lifestance is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aesthetic Medical Intl and Lifestance Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestance Health 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 Lifestance Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestance Health has no effect on the direction of Aesthetic Medical i.e., Aesthetic Medical and Lifestance Health go up and down completely randomly.

Pair Corralation between Aesthetic Medical and Lifestance Health

If you would invest  670.00  in Lifestance Health Group on September 4, 2024 and sell it today you would earn a total of  81.00  from holding Lifestance Health Group or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Aesthetic Medical Intl  vs.  Lifestance Health Group

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.

Lifestance Health

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lifestance Health Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Lifestance Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aesthetic Medical and Lifestance Health

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

The idea behind Aesthetic Medical Intl and Lifestance Health Group 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.