Correlation Between Spartoo SAS and Affluent Medical

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

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

Diversification Opportunities for Spartoo SAS and Affluent Medical

0.02

Correlation Coefficient

Spartoo SAS  Affluent Medical

Significant diversification

The 3 months correlation between Spartoo and Affluent is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Spartoo SAS and Affluent Medical SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affluent Medical SAS and Spartoo SAS 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 Spartoo SAS are associated (or correlated) with Affluent Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affluent Medical SAS has no effect on the direction of Spartoo SAS i.e., Spartoo SAS and Affluent Medical go up and down completely randomly.

Pair Corralation between Spartoo SAS and Affluent Medical

Assuming the 90 days trading horizon Spartoo SAS is expected to under-perform the Affluent Medical. In addition to that, Spartoo SAS is 1.54 times more volatile than Affluent Medical SAS. It trades about -0.03 of its total potential returns per unit of risk. Affluent Medical SAS is currently generating about 0.08 per unit of volatility. If you would invest  125.00  in Affluent Medical SAS on December 4, 2024 and sell it today you would earn a total of  17.00  from holding Affluent Medical SAS or generate 13.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Spartoo SAS  vs.  Affluent Medical SAS

Spartoo SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spartoo SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Affluent Medical SAS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Affluent Medical SAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Affluent Medical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spartoo SAS and Affluent Medical

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

The idea behind Spartoo SAS and Affluent Medical SAS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.