Correlation Between AiMedia Technologies and Anatara Lifesciences

Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies and Anatara Lifesciences 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 AiMedia Technologies and Anatara Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AiMedia Technologies and Anatara Lifesciences, you can compare the effects of market volatilities on AiMedia Technologies and Anatara Lifesciences 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 AiMedia Technologies with a short position of Anatara Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Anatara Lifesciences.

Diversification Opportunities for AiMedia Technologies and Anatara Lifesciences

-0.25

Correlation Coefficient

AiMedia Technologies  Anatara Lifesciences

Very good diversification

The 3 months correlation between AiMedia and Anatara is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Anatara Lifesciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anatara Lifesciences and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Anatara Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anatara Lifesciences has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Anatara Lifesciences go up and down completely randomly.

Pair Corralation between AiMedia Technologies and Anatara Lifesciences

Assuming the 90 days trading horizon AiMedia Technologies is expected to under-perform the Anatara Lifesciences. But the stock apears to be less risky and, when comparing its historical volatility, AiMedia Technologies is 1.46 times less risky than Anatara Lifesciences. The stock trades about -0.02 of its potential returns per unit of risk. The Anatara Lifesciences is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4.60  in Anatara Lifesciences on October 9, 2024 and sell it today you would earn a total of  0.40  from holding Anatara Lifesciences or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

AiMedia Technologies  vs.  Anatara Lifesciences

AiMedia Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AiMedia Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, AiMedia Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Anatara Lifesciences

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anatara Lifesciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Anatara Lifesciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AiMedia Technologies and Anatara Lifesciences

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

The idea behind AiMedia Technologies and Anatara Lifesciences 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.