Correlation Between Auna SA and Oncology Institute

Can any of the company-specific risk be diversified away by investing in both Auna SA and Oncology Institute 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 Auna SA and Oncology Institute into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Auna SA and The Oncology Institute, you can compare the effects of market volatilities on Auna SA and Oncology Institute 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 Auna SA with a short position of Oncology Institute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auna SA and Oncology Institute.

Diversification Opportunities for Auna SA and Oncology Institute

0.05

Correlation Coefficient

Auna SA  Oncology Institute

Significant diversification

The 3 months correlation between Auna and Oncology is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Auna SA and The Oncology Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Oncology Institute and Auna SA 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 Auna SA are associated (or correlated) with Oncology Institute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Oncology Institute has no effect on the direction of Auna SA i.e., Auna SA and Oncology Institute go up and down completely randomly.

Pair Corralation between Auna SA and Oncology Institute

Given the investment horizon of 90 days Auna SA is expected to generate 8.06 times less return on investment than Oncology Institute. But when comparing it to its historical volatility, Auna SA is 11.47 times less risky than Oncology Institute. It trades about 0.01 of its potential returns per unit of risk. The Oncology Institute is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1.58  in The Oncology Institute on October 6, 2024 and sell it today you would lose (0.53) from holding The Oncology Institute or give up 33.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Auna SA  vs.  The Oncology Institute

Auna SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Auna SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Auna SA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

The Oncology Institute

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Oncology Institute are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Oncology Institute showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Auna SA and Oncology Institute

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

The idea behind Auna SA and The Oncology Institute 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.