Correlation Between Aesthetic Medical and Medical Facilities

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

Diversification Opportunities for Aesthetic Medical and Medical Facilities

0.0

Correlation Coefficient

Aesthetic Medical  Medical Facilities

Pay attention - limited upside

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

Pair Corralation between Aesthetic Medical and Medical Facilities

If you would invest  1,079  in Medical Facilities on December 30, 2024 and sell it today you would earn a total of  40.00  from holding Medical Facilities or generate 3.71% return on investment over 90 days.

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

Aesthetic Medical Intl  vs.  Medical Facilities

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.

Medical Facilities

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medical Facilities are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Medical Facilities is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aesthetic Medical and Medical Facilities

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

The idea behind Aesthetic Medical Intl and Medical Facilities 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.