Correlation Between Community Health and Airsculpt Technologies

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

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

Diversification Opportunities for Community Health and Airsculpt Technologies

-0.16

Correlation Coefficient

Community Health  Airsculpt Technologies

Good diversification

The 3 months correlation between Community and Airsculpt is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Community Health Systems and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies and Community Health 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 Community Health Systems are associated (or correlated) with Airsculpt Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airsculpt Technologies has no effect on the direction of Community Health i.e., Community Health and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Community Health and Airsculpt Technologies

Considering the 90-day investment horizon Community Health Systems is expected to under-perform the Airsculpt Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Community Health Systems is 1.69 times less risky than Airsculpt Technologies. The stock trades about -0.32 of its potential returns per unit of risk. The Airsculpt Technologies is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  615.00  in Airsculpt Technologies on October 12, 2024 and sell it today you would lose (12.00) from holding Airsculpt Technologies or give up 1.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Community Health Systems  vs.  Airsculpt Technologies

Community Health Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Community Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Airsculpt Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Community Health and Airsculpt Technologies

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

The idea behind Community Health Systems and Airsculpt Technologies 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 Stocks Directory module to find actively traded stocks across global markets.