Correlation Between Heart Test and Aethlon Medical

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

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

Diversification Opportunities for Heart Test and Aethlon Medical

0.23

Correlation Coefficient

Heart Test  Aethlon Medical

Modest diversification

The 3 months correlation between Heart and Aethlon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Heart Test Laboratories and Aethlon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aethlon Medical and Heart Test 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 Heart Test Laboratories are associated (or correlated) with Aethlon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aethlon Medical has no effect on the direction of Heart Test i.e., Heart Test and Aethlon Medical go up and down completely randomly.

Pair Corralation between Heart Test and Aethlon Medical

Given the investment horizon of 90 days Heart Test Laboratories is expected to under-perform the Aethlon Medical. But the stock apears to be less risky and, when comparing its historical volatility, Heart Test Laboratories is 5.08 times less risky than Aethlon Medical. The stock trades about -0.18 of its potential returns per unit of risk. The Aethlon Medical is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Aethlon Medical on October 10, 2024 and sell it today you would earn a total of  48.00  from holding Aethlon Medical or generate 126.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Heart Test Laboratories  vs.  Aethlon Medical

Heart Test Laboratories

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heart Test Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Heart Test is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Aethlon Medical

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aethlon Medical are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Aethlon Medical exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heart Test and Aethlon Medical

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

The idea behind Heart Test Laboratories and Aethlon Medical 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.