Correlation Between Advanced Medical and Anglo Asian

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

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

Diversification Opportunities for Advanced Medical and Anglo Asian

0.22

Correlation Coefficient

Advanced Medical  Anglo Asian

Modest diversification

The 3 months correlation between Advanced and Anglo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining and Advanced 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 Advanced Medical Solutions are associated (or correlated) with Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Advanced Medical i.e., Advanced Medical and Anglo Asian go up and down completely randomly.

Pair Corralation between Advanced Medical and Anglo Asian

Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 1.43 times more return on investment than Anglo Asian. However, Advanced Medical is 1.43 times more volatile than Anglo Asian Mining. It trades about 0.06 of its potential returns per unit of risk. Anglo Asian Mining is currently generating about -0.04 per unit of risk. If you would invest  20,300  in Advanced Medical Solutions on October 22, 2024 and sell it today you would earn a total of  1,800  from holding Advanced Medical Solutions or generate 8.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Advanced Medical Solutions  vs.  Anglo Asian Mining

Advanced Medical Sol

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Medical Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Advanced Medical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Anglo Asian Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anglo Asian Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Anglo Asian is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Advanced Medical and Anglo Asian

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

The idea behind Advanced Medical Solutions and Anglo Asian Mining 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.