Correlation Between Establishment Labs and Ainos

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

By analyzing existing cross correlation between Establishment Labs Holdings and Ainos Inc, you can compare the effects of market volatilities on Establishment Labs and Ainos 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 Establishment Labs with a short position of Ainos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Establishment Labs and Ainos.

Diversification Opportunities for Establishment Labs and Ainos

0.07

Correlation Coefficient

Establishment Labs  Ainos

Significant diversification

The 3 months correlation between Establishment and Ainos is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Establishment Labs Holdings and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc and Establishment Labs 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 Establishment Labs Holdings are associated (or correlated) with Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of Establishment Labs i.e., Establishment Labs and Ainos go up and down completely randomly.

Pair Corralation between Establishment Labs and Ainos

Given the investment horizon of 90 days Establishment Labs Holdings is expected to under-perform the Ainos. But the stock apears to be less risky and, when comparing its historical volatility, Establishment Labs Holdings is 28.28 times less risky than Ainos. The stock trades about 0.0 of its potential returns per unit of risk. The Ainos Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Ainos Inc on October 5, 2024 and sell it today you would lose (21.00) from holding Ainos Inc or give up 80.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Establishment Labs Holdings  vs.  Ainos Inc

Establishment Labs

Risk-Adjusted Performance

1 of 100

Weak

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

Ainos Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ainos Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Ainos showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Establishment Labs and Ainos

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

The idea behind Establishment Labs Holdings and Ainos Inc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.